Correlation Between Catena Media and Metacon AB
Can any of the company-specific risk be diversified away by investing in both Catena Media and Metacon AB 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 Metacon AB 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 Metacon AB, you can compare the effects of market volatilities on Catena Media and Metacon AB 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 Metacon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Metacon AB.
Diversification Opportunities for Catena Media and Metacon AB
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catena and Metacon is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media plc and Metacon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metacon 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 Metacon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metacon AB has no effect on the direction of Catena Media i.e., Catena Media and Metacon AB go up and down completely randomly.
Pair Corralation between Catena Media and Metacon AB
Assuming the 90 days trading horizon Catena Media plc is expected to under-perform the Metacon AB. But the stock apears to be less risky and, when comparing its historical volatility, Catena Media plc is 1.73 times less risky than Metacon AB. The stock trades about -0.07 of its potential returns per unit of risk. The Metacon AB is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 129.00 in Metacon AB on October 12, 2024 and sell it today you would lose (116.00) from holding Metacon AB or give up 89.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media plc vs. Metacon AB
Performance |
| Timeline |
| Catena Media plc |
| Metacon AB |
Catena Media and Metacon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Metacon AB
The main advantage of trading using opposite Catena Media and Metacon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Metacon AB 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 Metacon AB will offset losses from the drop in Metacon AB's long position.| Catena Media vs. Betsson AB | Catena Media vs. Kambi Group PLC | Catena Media vs. Better Collective | Catena Media vs. Evolution AB |
| Metacon AB vs. Addtech AB | Metacon AB vs. MTI Investment SE | Metacon AB vs. Lime Technologies AB | Metacon AB vs. Catena Media plc |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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