Correlation Between Catena Media and Evolution
Can any of the company-specific risk be diversified away by investing in both Catena Media and Evolution 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 Evolution 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 Evolution AB, you can compare the effects of market volatilities on Catena Media and Evolution 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 Evolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Evolution.
Diversification Opportunities for Catena Media and Evolution
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catena and Evolution is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media plc and Evolution AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution 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 Evolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution AB has no effect on the direction of Catena Media i.e., Catena Media and Evolution go up and down completely randomly.
Pair Corralation between Catena Media and Evolution
Assuming the 90 days trading horizon Catena Media plc is expected to generate 0.8 times more return on investment than Evolution. However, Catena Media plc is 1.26 times less risky than Evolution. It trades about -0.01 of its potential returns per unit of risk. Evolution AB is currently generating about -0.1 per unit of risk. If you would invest 404.00 in Catena Media plc on November 2, 2024 and sell it today you would lose (3.00) from holding Catena Media plc or give up 0.74% 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. Evolution AB
Performance |
| Timeline |
| Catena Media plc |
| Evolution AB |
Catena Media and Evolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Evolution
The main advantage of trading using opposite Catena Media and Evolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Evolution 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 Evolution will offset losses from the drop in Evolution's long position.| Catena Media vs. Betsson AB | Catena Media vs. Kambi Group PLC | Catena Media vs. Better Collective | Catena Media vs. Evolution AB |
| Evolution vs. Embracer Group AB | Evolution vs. Sinch AB | Evolution vs. Kambi Group PLC | Evolution vs. Samhllsbyggnadsbolaget i Norden |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |