Correlation Between Catena AB and Dios Fastigheter
Can any of the company-specific risk be diversified away by investing in both Catena AB and Dios Fastigheter 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 Dios Fastigheter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena AB and Dios Fastigheter AB, you can compare the effects of market volatilities on Catena AB and Dios Fastigheter 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 Dios Fastigheter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena AB and Dios Fastigheter.
Diversification Opportunities for Catena AB and Dios Fastigheter
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Catena and Dios is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and Dios Fastigheter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dios Fastigheter 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 Dios Fastigheter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dios Fastigheter has no effect on the direction of Catena AB i.e., Catena AB and Dios Fastigheter go up and down completely randomly.
Pair Corralation between Catena AB and Dios Fastigheter
Assuming the 90 days trading horizon Catena AB is expected to generate 0.92 times more return on investment than Dios Fastigheter. However, Catena AB is 1.08 times less risky than Dios Fastigheter. It trades about 0.03 of its potential returns per unit of risk. Dios Fastigheter AB is currently generating about 0.01 per unit of risk. If you would invest 39,457 in Catena AB on August 31, 2024 and sell it today you would earn a total of 9,243 from holding Catena AB or generate 23.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Catena AB vs. Dios Fastigheter AB
Performance |
| Timeline |
| Catena AB |
| Dios Fastigheter |
Catena AB and Dios Fastigheter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena AB and Dios Fastigheter
The main advantage of trading using opposite Catena AB and Dios Fastigheter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena AB position performs unexpectedly, Dios Fastigheter 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 Dios Fastigheter will offset losses from the drop in Dios Fastigheter's long position.| Catena AB vs. Fastighets AB Balder | Catena AB vs. Fabege AB | Catena AB vs. Wihlborgs Fastigheter AB | Catena AB vs. AB Sagax |
| Dios Fastigheter vs. Fabege AB | Dios Fastigheter vs. Wihlborgs Fastigheter AB | Dios Fastigheter vs. Castellum AB | Dios Fastigheter vs. Fastighets AB Balder |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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