Correlation Between Catena Media and TR Property
Can any of the company-specific risk be diversified away by investing in both Catena Media and TR Property 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 TR Property 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 TR Property Investment, you can compare the effects of market volatilities on Catena Media and TR Property 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 TR Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and TR Property.
Diversification Opportunities for Catena Media and TR Property
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catena and TRY is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and TR Property Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TR Property Investment 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 TR Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TR Property Investment has no effect on the direction of Catena Media i.e., Catena Media and TR Property go up and down completely randomly.
Pair Corralation between Catena Media and TR Property
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the TR Property. In addition to that, Catena Media is 3.24 times more volatile than TR Property Investment. It trades about -0.21 of its total potential returns per unit of risk. TR Property Investment is currently generating about -0.14 per unit of volatility. If you would invest 33,100 in TR Property Investment on August 29, 2024 and sell it today you would lose (1,250) from holding TR Property Investment or give up 3.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media PLC vs. TR Property Investment
Performance |
| Timeline |
| Catena Media PLC |
| TR Property Investment |
Catena Media and TR Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and TR Property
The main advantage of trading using opposite Catena Media and TR Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, TR Property 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 TR Property will offset losses from the drop in TR Property's long position.| Catena Media vs. Lendinvest PLC | Catena Media vs. Neometals | Catena Media vs. Coor Service Management | Catena Media vs. Albion Technology General |
| TR Property vs. Toyota Motor Corp | TR Property vs. Lendinvest PLC | TR Property vs. Neometals | TR Property vs. Coor Service Management |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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