Correlation Between Catena AB and TagMaster
Can any of the company-specific risk be diversified away by investing in both Catena AB and TagMaster 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 TagMaster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena AB and TagMaster AB Series, you can compare the effects of market volatilities on Catena AB and TagMaster 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 TagMaster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena AB and TagMaster.
Diversification Opportunities for Catena AB and TagMaster
Very poor diversification
The 3 months correlation between Catena and TagMaster is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and TagMaster AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TagMaster AB Series 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 TagMaster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TagMaster AB Series has no effect on the direction of Catena AB i.e., Catena AB and TagMaster go up and down completely randomly.
Pair Corralation between Catena AB and TagMaster
Assuming the 90 days trading horizon Catena AB is expected to under-perform the TagMaster. But the stock apears to be less risky and, when comparing its historical volatility, Catena AB is 4.44 times less risky than TagMaster. The stock trades about -0.24 of its potential returns per unit of risk. The TagMaster AB Series is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,300 in TagMaster AB Series on October 7, 2024 and sell it today you would lose (35.00) from holding TagMaster AB Series or give up 2.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena AB vs. TagMaster AB Series
Performance |
| Timeline |
| Catena AB |
| TagMaster AB Series |
Catena AB and TagMaster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena AB and TagMaster
The main advantage of trading using opposite Catena AB and TagMaster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena AB position performs unexpectedly, TagMaster 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 TagMaster will offset losses from the drop in TagMaster'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 |
| TagMaster vs. Waystream Holding AB | TagMaster vs. Gapwaves AB Series | TagMaster vs. Organoclick AB | TagMaster 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |