Correlation Between Catena AB and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Catena AB and Inwido AB 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 Inwido AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena AB and Inwido AB, you can compare the effects of market volatilities on Catena AB and Inwido AB 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 Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena AB and Inwido AB.
Diversification Opportunities for Catena AB and Inwido AB
Very good diversification
The 3 months correlation between Catena and Inwido is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido 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 Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Catena AB i.e., Catena AB and Inwido AB go up and down completely randomly.
Pair Corralation between Catena AB and Inwido AB
Assuming the 90 days trading horizon Catena AB is expected to under-perform the Inwido AB. But the stock apears to be less risky and, when comparing its historical volatility, Catena AB is 1.33 times less risky than Inwido AB. The stock trades about -0.17 of its potential returns per unit of risk. The Inwido AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 18,070 in Inwido AB on August 31, 2024 and sell it today you would earn a total of 230.00 from holding Inwido AB or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena AB vs. Inwido AB
Performance |
| Timeline |
| Catena AB |
| Inwido AB |
Catena AB and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena AB and Inwido AB
The main advantage of trading using opposite Catena AB and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena AB position performs unexpectedly, Inwido AB 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 Inwido AB will offset losses from the drop in Inwido AB'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 |
| Inwido AB vs. Scandinavian ChemoTech AB | Inwido AB vs. Addtech AB | Inwido AB vs. Sdiptech AB | Inwido AB vs. G5 Entertainment publ |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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