Correlation Between EEducation Albert and Catella AB
Can any of the company-specific risk be diversified away by investing in both EEducation Albert and Catella AB 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 EEducation Albert and Catella AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eEducation Albert AB and Catella AB, you can compare the effects of market volatilities on EEducation Albert and Catella AB 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 EEducation Albert with a short position of Catella AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of EEducation Albert and Catella AB.
Diversification Opportunities for EEducation Albert and Catella AB
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EEducation and Catella is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding eEducation Albert AB and Catella AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catella AB and EEducation Albert 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 eEducation Albert AB are associated (or correlated) with Catella AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catella AB has no effect on the direction of EEducation Albert i.e., EEducation Albert and Catella AB go up and down completely randomly.
Pair Corralation between EEducation Albert and Catella AB
Assuming the 90 days trading horizon eEducation Albert AB is expected to under-perform the Catella AB. In addition to that, EEducation Albert is 1.69 times more volatile than Catella AB. It trades about -0.07 of its total potential returns per unit of risk. Catella AB is currently generating about -0.03 per unit of volatility. If you would invest 3,079 in Catella AB on September 12, 2024 and sell it today you would lose (469.00) from holding Catella AB or give up 15.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eEducation Albert AB vs. Catella AB
Performance |
| Timeline |
| eEducation Albert |
| Catella AB |
EEducation Albert and Catella AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EEducation Albert and Catella AB
The main advantage of trading using opposite EEducation Albert and Catella AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EEducation Albert position performs unexpectedly, Catella AB 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 Catella AB will offset losses from the drop in Catella AB's long position.| EEducation Albert vs. Greater Than AB | EEducation Albert vs. Cint Group AB | EEducation Albert vs. Acconeer AB | EEducation Albert vs. IAR Systems Group |
| Catella AB vs. Clas Ohlson AB | Catella AB vs. New Wave Group | Catella AB vs. Bilia AB | Catella AB vs. Inwido AB |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |