Correlation Between Catena Media and FormPipe Software
Can any of the company-specific risk be diversified away by investing in both Catena Media and FormPipe Software 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 FormPipe Software 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 FormPipe Software AB, you can compare the effects of market volatilities on Catena Media and FormPipe Software 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 FormPipe Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and FormPipe Software.
Diversification Opportunities for Catena Media and FormPipe Software
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Catena and FormPipe is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media plc and FormPipe Software AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormPipe Software 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 FormPipe Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormPipe Software has no effect on the direction of Catena Media i.e., Catena Media and FormPipe Software go up and down completely randomly.
Pair Corralation between Catena Media and FormPipe Software
Assuming the 90 days trading horizon Catena Media plc is expected to generate 0.51 times more return on investment than FormPipe Software. However, Catena Media plc is 1.96 times less risky than FormPipe Software. It trades about -0.01 of its potential returns per unit of risk. FormPipe Software AB is currently generating about -0.05 per unit of risk. If you would invest 403.00 in Catena Media plc on November 4, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media plc vs. FormPipe Software AB
Performance |
| Timeline |
| Catena Media plc |
| FormPipe Software |
Catena Media and FormPipe Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and FormPipe Software
The main advantage of trading using opposite Catena Media and FormPipe Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, FormPipe Software 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 FormPipe Software will offset losses from the drop in FormPipe Software's long position.| Catena Media vs. Betsson AB | Catena Media vs. Kambi Group PLC | Catena Media vs. Better Collective | Catena Media vs. Evolution AB |
| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |