Correlation Between Catena Media and Betsson AB
Can any of the company-specific risk be diversified away by investing in both Catena Media and Betsson 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 Betsson 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 Betsson AB, you can compare the effects of market volatilities on Catena Media and Betsson 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 Betsson AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Betsson AB.
Diversification Opportunities for Catena Media and Betsson AB
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catena and Betsson is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media plc and Betsson AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betsson 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 Betsson AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betsson AB has no effect on the direction of Catena Media i.e., Catena Media and Betsson AB go up and down completely randomly.
Pair Corralation between Catena Media and Betsson AB
Assuming the 90 days trading horizon Catena Media plc is expected to under-perform the Betsson AB. In addition to that, Catena Media is 2.28 times more volatile than Betsson AB. It trades about -0.06 of its total potential returns per unit of risk. Betsson AB is currently generating about 0.08 per unit of volatility. If you would invest 7,804 in Betsson AB on August 24, 2024 and sell it today you would earn a total of 6,464 from holding Betsson AB or generate 82.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media plc vs. Betsson AB
Performance |
| Timeline |
| Catena Media plc |
| Betsson AB |
Catena Media and Betsson AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Betsson AB
The main advantage of trading using opposite Catena Media and Betsson AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Betsson 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 Betsson AB will offset losses from the drop in Betsson AB's long position.| Catena Media vs. Betsson AB | Catena Media vs. Kambi Group PLC | Catena Media vs. Better Collective | Catena Media vs. Evolution AB |
| Betsson AB vs. XMReality AB | Betsson AB vs. Enersize Oy | Betsson AB vs. Mavshack publ AB | Betsson AB vs. Serstech 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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