Correlation Between Catena Media and Orient Telecoms
Can any of the company-specific risk be diversified away by investing in both Catena Media and Orient Telecoms at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Catena Media and Orient Telecoms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena Media PLC and Orient Telecoms, you can compare the effects of market volatilities on Catena Media and Orient Telecoms and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Catena Media with a short position of Orient Telecoms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Orient Telecoms.
Diversification Opportunities for Catena Media and Orient Telecoms
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catena and Orient is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and Orient Telecoms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Telecoms and Catena Media is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Catena Media PLC are associated (or correlated) with Orient Telecoms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Telecoms has no effect on the direction of Catena Media i.e., Catena Media and Orient Telecoms go up and down completely randomly.
Pair Corralation between Catena Media and Orient Telecoms
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Orient Telecoms. In addition to that, Catena Media is 1.88 times more volatile than Orient Telecoms. It trades about -0.06 of its total potential returns per unit of risk. Orient Telecoms is currently generating about -0.06 per unit of volatility. If you would invest 1,650 in Orient Telecoms on September 3, 2024 and sell it today you would lose (850.00) from holding Orient Telecoms or give up 51.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media PLC vs. Orient Telecoms
Performance |
| Timeline |
| Catena Media PLC |
| Orient Telecoms |
Catena Media and Orient Telecoms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Orient Telecoms
The main advantage of trading using opposite Catena Media and Orient Telecoms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Orient Telecoms can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Orient Telecoms will offset losses from the drop in Orient Telecoms' long position.| Catena Media vs. Waste Management | Catena Media vs. XLMedia PLC | Catena Media vs. Liontrust Asset Management | Catena Media vs. Flutter Entertainment PLC |
| Orient Telecoms vs. Catena Media PLC | Orient Telecoms vs. Catalyst Media Group | Orient Telecoms vs. Charter Communications Cl | Orient Telecoms vs. Cellnex Telecom SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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