Correlation Between Catella AB and VNV Global
Can any of the company-specific risk be diversified away by investing in both Catella AB and VNV Global 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 Catella AB and VNV Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catella AB A and VNV Global AB, you can compare the effects of market volatilities on Catella AB and VNV Global 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 Catella AB with a short position of VNV Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catella AB and VNV Global.
Diversification Opportunities for Catella AB and VNV Global
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catella and VNV is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Catella AB A and VNV Global AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VNV Global AB and Catella AB 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 Catella AB A are associated (or correlated) with VNV Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VNV Global AB has no effect on the direction of Catella AB i.e., Catella AB and VNV Global go up and down completely randomly.
Pair Corralation between Catella AB and VNV Global
Assuming the 90 days trading horizon Catella AB A is expected to under-perform the VNV Global. In addition to that, Catella AB is 1.69 times more volatile than VNV Global AB. It trades about -0.1 of its total potential returns per unit of risk. VNV Global AB is currently generating about 0.13 per unit of volatility. If you would invest 1,823 in VNV Global AB on September 13, 2024 and sell it today you would earn a total of 88.00 from holding VNV Global AB or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catella AB A vs. VNV Global AB
Performance |
| Timeline |
| Catella AB A |
| VNV Global AB |
Catella AB and VNV Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catella AB and VNV Global
The main advantage of trading using opposite Catella AB and VNV Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catella AB position performs unexpectedly, VNV Global 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 VNV Global will offset losses from the drop in VNV Global's long position.| Catella AB vs. Catella AB | Catella AB vs. Svolder AB | Catella AB vs. Beijer Alma AB | Catella AB vs. BTS Group AB |
| VNV Global vs. Catella AB | VNV Global vs. Catella AB A | VNV Global vs. KABE Group AB | VNV Global vs. IAR Systems Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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