Correlation Between Catena AB and Alimak Hek
Can any of the company-specific risk be diversified away by investing in both Catena AB and Alimak Hek 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 Catena AB and Alimak Hek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena AB and Alimak Hek Group, you can compare the effects of market volatilities on Catena AB and Alimak Hek 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 Catena AB with a short position of Alimak Hek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena AB and Alimak Hek.
Diversification Opportunities for Catena AB and Alimak Hek
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catena and Alimak is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and Alimak Hek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimak Hek Group and Catena 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 Catena AB are associated (or correlated) with Alimak Hek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimak Hek Group has no effect on the direction of Catena AB i.e., Catena AB and Alimak Hek go up and down completely randomly.
Pair Corralation between Catena AB and Alimak Hek
Assuming the 90 days trading horizon Catena AB is expected to under-perform the Alimak Hek. In addition to that, Catena AB is 1.04 times more volatile than Alimak Hek Group. It trades about -0.12 of its total potential returns per unit of risk. Alimak Hek Group is currently generating about 0.07 per unit of volatility. If you would invest 11,680 in Alimak Hek Group on August 28, 2024 and sell it today you would earn a total of 220.00 from holding Alimak Hek Group or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena AB vs. Alimak Hek Group
Performance |
| Timeline |
| Catena AB |
| Alimak Hek Group |
Catena AB and Alimak Hek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena AB and Alimak Hek
The main advantage of trading using opposite Catena AB and Alimak Hek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena AB position performs unexpectedly, Alimak Hek 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 Alimak Hek will offset losses from the drop in Alimak Hek's long position.The idea behind Catena AB and Alimak Hek Group 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.| Alimak Hek vs. Inwido AB | Alimak Hek vs. Bufab Holding AB | Alimak Hek vs. Cloetta AB | Alimak Hek vs. Dometic Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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