Correlation Between DistIT AB and Catella AB
Can any of the company-specific risk be diversified away by investing in both DistIT AB and Catella 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 DistIT AB and Catella AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DistIT AB and Catella AB, you can compare the effects of market volatilities on DistIT AB and Catella 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 DistIT AB with a short position of Catella AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of DistIT AB and Catella AB.
Diversification Opportunities for DistIT AB and Catella AB
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DistIT and Catella is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding DistIT AB and Catella AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catella AB and DistIT AB 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 DistIT AB are associated (or correlated) with Catella AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catella AB has no effect on the direction of DistIT AB i.e., DistIT AB and Catella AB go up and down completely randomly.
Pair Corralation between DistIT AB and Catella AB
Assuming the 90 days trading horizon DistIT AB is expected to under-perform the Catella AB. In addition to that, DistIT AB is 3.71 times more volatile than Catella AB. It trades about -0.12 of its total potential returns per unit of risk. Catella AB is currently generating about -0.34 per unit of volatility. If you would invest 2,870 in Catella AB on September 13, 2024 and sell it today you would lose (260.00) from holding Catella AB or give up 9.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DistIT AB vs. Catella AB
Performance |
| Timeline |
| DistIT AB |
| Catella AB |
DistIT AB and Catella AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DistIT AB and Catella AB
The main advantage of trading using opposite DistIT AB and Catella AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DistIT AB position performs unexpectedly, Catella 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 Catella AB will offset losses from the drop in Catella AB's long position.| DistIT AB vs. Alcadon Group AB | DistIT AB vs. IAR Systems Group | DistIT AB vs. Dustin Group AB | DistIT AB vs. Generic Sweden publ |
| Catella AB vs. Clas Ohlson AB | Catella AB vs. New Wave Group | Catella AB vs. Bilia AB | Catella AB vs. Inwido 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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