Correlation Between SA Catana and Vetoquinol
Can any of the company-specific risk be diversified away by investing in both SA Catana and Vetoquinol 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 SA Catana and Vetoquinol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SA Catana Group and Vetoquinol, you can compare the effects of market volatilities on SA Catana and Vetoquinol 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 SA Catana with a short position of Vetoquinol. Check out your portfolio center. Please also check ongoing floating volatility patterns of SA Catana and Vetoquinol.
Diversification Opportunities for SA Catana and Vetoquinol
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CATG and Vetoquinol is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SA Catana Group and Vetoquinol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vetoquinol and SA Catana 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 SA Catana Group are associated (or correlated) with Vetoquinol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vetoquinol has no effect on the direction of SA Catana i.e., SA Catana and Vetoquinol go up and down completely randomly.
Pair Corralation between SA Catana and Vetoquinol
Assuming the 90 days trading horizon SA Catana Group is expected to generate 1.51 times more return on investment than Vetoquinol. However, SA Catana is 1.51 times more volatile than Vetoquinol. It trades about -0.02 of its potential returns per unit of risk. Vetoquinol is currently generating about -0.07 per unit of risk. If you would invest 468.00 in SA Catana Group on September 2, 2024 and sell it today you would lose (6.00) from holding SA Catana Group or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SA Catana Group vs. Vetoquinol
Performance |
| Timeline |
| SA Catana Group |
| Vetoquinol |
SA Catana and Vetoquinol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SA Catana and Vetoquinol
The main advantage of trading using opposite SA Catana and Vetoquinol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SA Catana position performs unexpectedly, Vetoquinol 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 Vetoquinol will offset losses from the drop in Vetoquinol's long position.| SA Catana vs. Sogeclair SA | SA Catana vs. BEBO Health SA | SA Catana vs. Marie Brizard Wine | SA Catana vs. Gaztransport Technigaz SAS |
| Vetoquinol vs. Virbac SA | Vetoquinol vs. Thermador Groupe SA | Vetoquinol vs. Robertet SA | Vetoquinol vs. Trigano SA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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