Correlation Between Catena AB and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Catena AB and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena AB and Dow Jones Industrial, you can compare the effects of market volatilities on Catena AB and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena AB and Dow Jones.
Diversification Opportunities for Catena AB and Dow Jones
Excellent diversification
The 3 months correlation between Catena and Dow is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Catena AB i.e., Catena AB and Dow Jones go up and down completely randomly.
Pair Corralation between Catena AB and Dow Jones
Assuming the 90 days trading horizon Catena AB is expected to generate 2.53 times more return on investment than Dow Jones. However, Catena AB is 2.53 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 37,592 in Catena AB on August 30, 2024 and sell it today you would earn a total of 11,658 from holding Catena AB or generate 31.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Catena AB vs. Dow Jones Industrial
Performance |
| Timeline |
Catena AB and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Catena AB
Pair trading matchups for Catena AB
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Catena AB and Dow Jones
The main advantage of trading using opposite Catena AB and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena AB position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Catena AB vs. Fastighets AB Balder | Catena AB vs. Fabege AB | Catena AB vs. Wihlborgs Fastigheter AB | Catena AB vs. AB Sagax |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |