Correlation Between FormPipe Software and Catena Media
Can any of the company-specific risk be diversified away by investing in both FormPipe Software and Catena Media 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 FormPipe Software and Catena Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FormPipe Software AB and Catena Media plc, you can compare the effects of market volatilities on FormPipe Software and Catena Media 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 FormPipe Software with a short position of Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and Catena Media.
Diversification Opportunities for FormPipe Software and Catena Media
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FormPipe and Catena is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Catena Media plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media plc and FormPipe Software 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 FormPipe Software AB are associated (or correlated) with Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media plc has no effect on the direction of FormPipe Software i.e., FormPipe Software and Catena Media go up and down completely randomly.
Pair Corralation between FormPipe Software and Catena Media
Assuming the 90 days trading horizon FormPipe Software AB is expected to under-perform the Catena Media. In addition to that, FormPipe Software is 1.96 times more volatile than Catena Media plc. It trades about -0.05 of its total potential returns per unit of risk. Catena Media plc is currently generating about -0.01 per unit of volatility. 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 |
FormPipe Software AB vs. Catena Media plc
Performance |
| Timeline |
| FormPipe Software |
| Catena Media plc |
FormPipe Software and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and Catena Media
The main advantage of trading using opposite FormPipe Software and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, Catena Media 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 Media will offset losses from the drop in Catena Media's long position.| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic AB |
| Catena Media vs. Betsson AB | Catena Media vs. Kambi Group PLC | Catena Media vs. Better Collective | Catena Media vs. Evolution 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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