Correlation Between Catella AB and Clas Ohlson
Can any of the company-specific risk be diversified away by investing in both Catella AB and Clas Ohlson 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 Clas Ohlson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catella AB and Clas Ohlson AB, you can compare the effects of market volatilities on Catella AB and Clas Ohlson 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 Clas Ohlson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catella AB and Clas Ohlson.
Diversification Opportunities for Catella AB and Clas Ohlson
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catella and Clas is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Catella AB and Clas Ohlson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clas Ohlson 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 are associated (or correlated) with Clas Ohlson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clas Ohlson AB has no effect on the direction of Catella AB i.e., Catella AB and Clas Ohlson go up and down completely randomly.
Pair Corralation between Catella AB and Clas Ohlson
Assuming the 90 days trading horizon Catella AB is expected to generate 26.76 times less return on investment than Clas Ohlson. But when comparing it to its historical volatility, Catella AB is 1.47 times less risky than Clas Ohlson. It trades about 0.01 of its potential returns per unit of risk. Clas Ohlson AB is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 20,709 in Clas Ohlson AB on October 23, 2024 and sell it today you would earn a total of 1,871 from holding Clas Ohlson AB or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catella AB vs. Clas Ohlson AB
Performance |
| Timeline |
| Catella AB |
| Clas Ohlson AB |
Catella AB and Clas Ohlson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catella AB and Clas Ohlson
The main advantage of trading using opposite Catella AB and Clas Ohlson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catella AB position performs unexpectedly, Clas Ohlson 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 Clas Ohlson will offset losses from the drop in Clas Ohlson'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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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