Correlation Between CAP LEASE and Catena Media
Can any of the company-specific risk be diversified away by investing in both CAP LEASE and Catena Media 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 CAP LEASE and Catena Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Catena Media PLC, you can compare the effects of market volatilities on CAP LEASE and Catena Media 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 CAP LEASE with a short position of Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Catena Media.
Diversification Opportunities for CAP LEASE and Catena Media
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CAP and Catena is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC and CAP LEASE 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 CAP LEASE AVIATION are associated (or correlated) with Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of CAP LEASE i.e., CAP LEASE and Catena Media go up and down completely randomly.
Pair Corralation between CAP LEASE and Catena Media
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to under-perform the Catena Media. But the stock apears to be less risky and, when comparing its historical volatility, CAP LEASE AVIATION is 3.66 times less risky than Catena Media. The stock trades about -0.14 of its potential returns per unit of risk. The Catena Media PLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 415.00 in Catena Media PLC on September 15, 2024 and sell it today you would earn a total of 106.00 from holding Catena Media PLC or generate 25.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Catena Media PLC
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Catena Media PLC |
CAP LEASE and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Catena Media
The main advantage of trading using opposite CAP LEASE and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.| CAP LEASE vs. Givaudan SA | CAP LEASE vs. Antofagasta PLC | CAP LEASE vs. Ferrexpo PLC | CAP LEASE vs. Atalaya Mining |
| Catena Media vs. CAP LEASE AVIATION | Catena Media vs. Blackstone Loan Financing | Catena Media vs. Systemair AB | Catena Media vs. Ryanair Holdings plc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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