Correlation Between Catena Media and Acroud AB
Can any of the company-specific risk be diversified away by investing in both Catena Media and Acroud 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 Media and Acroud AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena Media plc and Acroud AB, you can compare the effects of market volatilities on Catena Media and Acroud 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 Media with a short position of Acroud AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Acroud AB.
Diversification Opportunities for Catena Media and Acroud AB
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catena and Acroud is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media plc and Acroud AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acroud AB and Catena Media 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 Media plc are associated (or correlated) with Acroud AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acroud AB has no effect on the direction of Catena Media i.e., Catena Media and Acroud AB go up and down completely randomly.
Pair Corralation between Catena Media and Acroud AB
Assuming the 90 days trading horizon Catena Media plc is expected to under-perform the Acroud AB. In addition to that, Catena Media is 1.13 times more volatile than Acroud AB. It trades about -0.14 of its total potential returns per unit of risk. Acroud AB is currently generating about -0.15 per unit of volatility. If you would invest 42.00 in Acroud AB on August 31, 2024 and sell it today you would lose (7.00) from holding Acroud AB or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media plc vs. Acroud AB
Performance |
| Timeline |
| Catena Media plc |
| Acroud AB |
Catena Media and Acroud AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Acroud AB
The main advantage of trading using opposite Catena Media and Acroud AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Acroud 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 Acroud AB will offset losses from the drop in Acroud AB's long position.The idea behind Catena Media plc and Acroud AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Acroud AB vs. Raketech Group Holding | Acroud AB vs. Catena Media plc | Acroud AB vs. Enad Global 7 | Acroud AB vs. Better Collective |
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 CEOs Directory module to screen CEOs from public companies around the world.
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