Correlation Between Clas Ohlson and Catella AB
Can any of the company-specific risk be diversified away by investing in both Clas Ohlson and Catella 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 Clas Ohlson and Catella AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clas Ohlson AB and Catella AB, you can compare the effects of market volatilities on Clas Ohlson and Catella 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 Clas Ohlson with a short position of Catella AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clas Ohlson and Catella AB.
Diversification Opportunities for Clas Ohlson and Catella AB
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Clas and Catella is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Clas Ohlson AB and Catella AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catella AB and Clas Ohlson 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 Clas Ohlson AB are associated (or correlated) with Catella AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catella AB has no effect on the direction of Clas Ohlson i.e., Clas Ohlson and Catella AB go up and down completely randomly.
Pair Corralation between Clas Ohlson and Catella AB
Assuming the 90 days trading horizon Clas Ohlson AB is expected to generate 1.32 times more return on investment than Catella AB. However, Clas Ohlson is 1.32 times more volatile than Catella AB. It trades about 0.12 of its potential returns per unit of risk. Catella AB is currently generating about 0.01 per unit of risk. If you would invest 9,275 in Clas Ohlson AB on September 12, 2024 and sell it today you would earn a total of 12,905 from holding Clas Ohlson AB or generate 139.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clas Ohlson AB vs. Catella AB
Performance |
| Timeline |
| Clas Ohlson AB |
| Catella AB |
Clas Ohlson and Catella AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clas Ohlson and Catella AB
The main advantage of trading using opposite Clas Ohlson and Catella AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clas Ohlson position performs unexpectedly, Catella 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 Catella AB will offset losses from the drop in Catella AB's long position.| Clas Ohlson vs. Tele2 AB | Clas Ohlson vs. Axfood AB | Clas Ohlson vs. Telia Company AB | Clas Ohlson vs. Byggmax Group AB |
| Catella AB vs. Clas Ohlson AB | Catella AB vs. New Wave Group | Catella AB vs. Bilia AB | Catella AB vs. Inwido AB |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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