Correlation Between Catella AB and AAC Clyde
Can any of the company-specific risk be diversified away by investing in both Catella AB and AAC Clyde 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 AAC Clyde into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catella AB and AAC Clyde Space, you can compare the effects of market volatilities on Catella AB and AAC Clyde 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 AAC Clyde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catella AB and AAC Clyde.
Diversification Opportunities for Catella AB and AAC Clyde
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catella and AAC is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Catella AB and AAC Clyde Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Clyde Space 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 are associated (or correlated) with AAC Clyde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Clyde Space has no effect on the direction of Catella AB i.e., Catella AB and AAC Clyde go up and down completely randomly.
Pair Corralation between Catella AB and AAC Clyde
Assuming the 90 days trading horizon Catella AB is expected to under-perform the AAC Clyde. But the stock apears to be less risky and, when comparing its historical volatility, Catella AB is 2.17 times less risky than AAC Clyde. The stock trades about -0.03 of its potential returns per unit of risk. The AAC Clyde Space is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,420 in AAC Clyde Space on September 12, 2024 and sell it today you would earn a total of 1,435 from holding AAC Clyde Space or generate 41.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catella AB vs. AAC Clyde Space
Performance |
| Timeline |
| Catella AB |
| AAC Clyde Space |
Catella AB and AAC Clyde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catella AB and AAC Clyde
The main advantage of trading using opposite Catella AB and AAC Clyde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catella AB position performs unexpectedly, AAC Clyde 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 AAC Clyde will offset losses from the drop in AAC Clyde's long position.| Catella AB vs. Clas Ohlson AB | Catella AB vs. New Wave Group | Catella AB vs. Bilia AB | Catella AB vs. Inwido AB |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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