Correlation Between Catena Media and Bredband2
Can any of the company-specific risk be diversified away by investing in both Catena Media and Bredband2 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 Bredband2 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 Bredband2 i Skandinavien, you can compare the effects of market volatilities on Catena Media and Bredband2 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 Bredband2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Bredband2.
Diversification Opportunities for Catena Media and Bredband2
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Catena and Bredband2 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media plc and Bredband2 i Skandinavien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bredband2 i Skandinavien 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 Bredband2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bredband2 i Skandinavien has no effect on the direction of Catena Media i.e., Catena Media and Bredband2 go up and down completely randomly.
Pair Corralation between Catena Media and Bredband2
Assuming the 90 days trading horizon Catena Media plc is expected to generate 5.91 times more return on investment than Bredband2. However, Catena Media is 5.91 times more volatile than Bredband2 i Skandinavien. It trades about 0.09 of its potential returns per unit of risk. Bredband2 i Skandinavien is currently generating about -0.18 per unit of risk. If you would invest 435.00 in Catena Media plc on September 13, 2024 and sell it today you would earn a total of 39.00 from holding Catena Media plc or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media plc vs. Bredband2 i Skandinavien
Performance |
| Timeline |
| Catena Media plc |
| Bredband2 i Skandinavien |
Catena Media and Bredband2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Bredband2
The main advantage of trading using opposite Catena Media and Bredband2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Bredband2 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 Bredband2 will offset losses from the drop in Bredband2's long position.| Catena Media vs. Betsson AB | Catena Media vs. Kambi Group PLC | Catena Media vs. Better Collective | Catena Media vs. Evolution AB |
| Bredband2 vs. Stillfront Group AB | Bredband2 vs. Paradox Interactive AB | Bredband2 vs. Catena Media plc | Bredband2 vs. Betsson 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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