Correlation Between Arion Banki and Catena Media
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By analyzing existing cross correlation between Arion banki hf and Catena Media plc, you can compare the effects of market volatilities on Arion Banki and Catena Media 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 Arion Banki with a short position of Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arion Banki and Catena Media.
Diversification Opportunities for Arion Banki and Catena Media
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Arion and Catena is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Arion banki hf and Catena Media plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media plc and Arion Banki 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 Arion banki hf are associated (or correlated) with Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media plc has no effect on the direction of Arion Banki i.e., Arion Banki and Catena Media go up and down completely randomly.
Pair Corralation between Arion Banki and Catena Media
Assuming the 90 days trading horizon Arion banki hf is expected to generate 0.37 times more return on investment than Catena Media. However, Arion banki hf is 2.71 times less risky than Catena Media. It trades about 0.07 of its potential returns per unit of risk. Catena Media plc is currently generating about -0.08 per unit of risk. If you would invest 1,180 in Arion banki hf on August 28, 2024 and sell it today you would earn a total of 30.00 from holding Arion banki hf or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arion banki hf vs. Catena Media plc
Performance |
| Timeline |
| Arion banki hf |
| Catena Media plc |
Arion Banki and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arion Banki and Catena Media
The main advantage of trading using opposite Arion Banki and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arion Banki position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.The idea behind Arion banki hf and Catena Media plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Catena Media vs. XMReality AB | Catena Media vs. Enersize Oy | Catena Media vs. Mavshack publ AB | Catena Media vs. Serstech 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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