Correlation Between Bredband2 and Catella AB
Can any of the company-specific risk be diversified away by investing in both Bredband2 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 Bredband2 and Catella AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bredband2 i Skandinavien and Catella AB, you can compare the effects of market volatilities on Bredband2 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 Bredband2 with a short position of Catella AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bredband2 and Catella AB.
Diversification Opportunities for Bredband2 and Catella AB
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bredband2 and Catella is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Bredband2 i Skandinavien and Catella AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catella AB and Bredband2 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 Bredband2 i Skandinavien 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 Bredband2 i.e., Bredband2 and Catella AB go up and down completely randomly.
Pair Corralation between Bredband2 and Catella AB
Assuming the 90 days trading horizon Bredband2 i Skandinavien is expected to generate 0.77 times more return on investment than Catella AB. However, Bredband2 i Skandinavien is 1.29 times less risky than Catella AB. It trades about -0.18 of its potential returns per unit of risk. Catella AB is currently generating about -0.34 per unit of risk. If you would invest 203.00 in Bredband2 i Skandinavien on September 13, 2024 and sell it today you would lose (8.00) from holding Bredband2 i Skandinavien or give up 3.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bredband2 i Skandinavien vs. Catella AB
Performance |
| Timeline |
| Bredband2 i Skandinavien |
| Catella AB |
Bredband2 and Catella AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bredband2 and Catella AB
The main advantage of trading using opposite Bredband2 and Catella AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bredband2 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.| Bredband2 vs. Stillfront Group AB | Bredband2 vs. Paradox Interactive AB | Bredband2 vs. Catena Media plc | Bredband2 vs. Betsson AB |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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