Correlation Between Catena Media and Embracer Group
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By analyzing existing cross correlation between Catena Media plc and Embracer Group AB, you can compare the effects of market volatilities on Catena Media and Embracer Group 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 Embracer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Embracer Group.
Diversification Opportunities for Catena Media and Embracer Group
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catena and Embracer is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media plc and Embracer Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embracer Group 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 Embracer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embracer Group AB has no effect on the direction of Catena Media i.e., Catena Media and Embracer Group go up and down completely randomly.
Pair Corralation between Catena Media and Embracer Group
Assuming the 90 days trading horizon Catena Media plc is expected to under-perform the Embracer Group. But the stock apears to be less risky and, when comparing its historical volatility, Catena Media plc is 1.89 times less risky than Embracer Group. The stock trades about -0.01 of its potential returns per unit of risk. The Embracer Group AB is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 20,022 in Embracer Group AB on November 2, 2024 and sell it today you would earn a total of 2,658 from holding Embracer Group AB or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media plc vs. Embracer Group AB
Performance |
| Timeline |
| Catena Media plc |
| Embracer Group AB |
Catena Media and Embracer Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Embracer Group
The main advantage of trading using opposite Catena Media and Embracer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Embracer Group 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 Embracer Group will offset losses from the drop in Embracer Group's long position.| Catena Media vs. Betsson AB | Catena Media vs. Kambi Group PLC | Catena Media vs. Better Collective | Catena Media vs. Evolution AB |
| Embracer Group vs. Evolution AB | Embracer Group vs. Sinch AB | Embracer Group vs. Samhllsbyggnadsbolaget i Norden | Embracer Group vs. Stillfront Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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