Correlation Between Eastnine and Catena AB
Can any of the company-specific risk be diversified away by investing in both Eastnine and Catena 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 Eastnine and Catena AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastnine AB and Catena AB, you can compare the effects of market volatilities on Eastnine and Catena 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 Eastnine with a short position of Catena AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastnine and Catena AB.
Diversification Opportunities for Eastnine and Catena AB
Good diversification
The 3 months correlation between Eastnine and Catena is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Eastnine AB and Catena AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena AB and Eastnine 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 Eastnine AB are associated (or correlated) with Catena AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena AB has no effect on the direction of Eastnine i.e., Eastnine and Catena AB go up and down completely randomly.
Pair Corralation between Eastnine and Catena AB
Assuming the 90 days trading horizon Eastnine AB is expected to generate 1.23 times more return on investment than Catena AB. However, Eastnine is 1.23 times more volatile than Catena AB. It trades about 0.12 of its potential returns per unit of risk. Catena AB is currently generating about -0.14 per unit of risk. If you would invest 4,273 in Eastnine AB on September 12, 2024 and sell it today you would earn a total of 531.00 from holding Eastnine AB or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastnine AB vs. Catena AB
Performance |
| Timeline |
| Eastnine AB |
| Catena AB |
Eastnine and Catena AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastnine and Catena AB
The main advantage of trading using opposite Eastnine and Catena AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastnine position performs unexpectedly, Catena 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 Catena AB will offset losses from the drop in Catena AB's long position.| Eastnine vs. Atrium Ljungberg AB | Eastnine vs. Dios Fastigheter AB | Eastnine vs. HEBA Fastighets AB | Eastnine vs. NP3 Fastigheter AB |
| Catena AB vs. Fastighets AB Balder | Catena AB vs. Fabege AB | Catena AB vs. Wihlborgs Fastigheter AB | Catena AB vs. AB Sagax |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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