Correlation Between Catena Media and Divio Technologies
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By analyzing existing cross correlation between Catena Media plc and Divio Technologies AB, you can compare the effects of market volatilities on Catena Media and Divio Technologies 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 Divio Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Divio Technologies.
Diversification Opportunities for Catena Media and Divio Technologies
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catena and Divio is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media plc and Divio Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Divio Technologies 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 Divio Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Divio Technologies has no effect on the direction of Catena Media i.e., Catena Media and Divio Technologies go up and down completely randomly.
Pair Corralation between Catena Media and Divio Technologies
Assuming the 90 days trading horizon Catena Media plc is expected to under-perform the Divio Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Catena Media plc is 2.44 times less risky than Divio Technologies. The stock trades about -0.05 of its potential returns per unit of risk. The Divio Technologies AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Divio Technologies AB on August 31, 2024 and sell it today you would lose (3.00) from holding Divio Technologies AB or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media plc vs. Divio Technologies AB
Performance |
| Timeline |
| Catena Media plc |
| Divio Technologies |
Catena Media and Divio Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Divio Technologies
The main advantage of trading using opposite Catena Media and Divio Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Divio Technologies 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 Divio Technologies will offset losses from the drop in Divio Technologies' long position.The idea behind Catena Media plc and Divio Technologies 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.| Divio Technologies vs. G5 Entertainment publ | Divio Technologies vs. Catena Media plc | Divio Technologies vs. Crunchfish AB | Divio Technologies vs. FormPipe Software 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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