Correlation Between Catena AB and Auriant Mining
Can any of the company-specific risk be diversified away by investing in both Catena AB and Auriant Mining 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 Auriant Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena AB and Auriant Mining AB, you can compare the effects of market volatilities on Catena AB and Auriant Mining 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 Auriant Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena AB and Auriant Mining.
Diversification Opportunities for Catena AB and Auriant Mining
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catena and Auriant is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and Auriant Mining AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auriant Mining AB 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 Auriant Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auriant Mining AB has no effect on the direction of Catena AB i.e., Catena AB and Auriant Mining go up and down completely randomly.
Pair Corralation between Catena AB and Auriant Mining
Assuming the 90 days trading horizon Catena AB is expected to generate 14.47 times less return on investment than Auriant Mining. But when comparing it to its historical volatility, Catena AB is 10.92 times less risky than Auriant Mining. It trades about 0.04 of its potential returns per unit of risk. Auriant Mining AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 123.00 in Auriant Mining AB on September 5, 2024 and sell it today you would earn a total of 17.00 from holding Auriant Mining AB or generate 13.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena AB vs. Auriant Mining AB
Performance |
| Timeline |
| Catena AB |
| Auriant Mining AB |
Catena AB and Auriant Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena AB and Auriant Mining
The main advantage of trading using opposite Catena AB and Auriant Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena AB position performs unexpectedly, Auriant Mining 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 Auriant Mining will offset losses from the drop in Auriant Mining's long position.The idea behind Catena AB and Auriant Mining AB 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.| Auriant Mining vs. Arctic Gold Publ | Auriant Mining vs. aXichem AB | Auriant Mining vs. Avensia publ AB | Auriant Mining vs. KABE 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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