Correlation Between Mulberry Group and Catena Media
Can any of the company-specific risk be diversified away by investing in both Mulberry Group 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 Mulberry Group and Catena Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Catena Media PLC, you can compare the effects of market volatilities on Mulberry Group 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 Mulberry Group with a short position of Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Catena Media.
Diversification Opportunities for Mulberry Group and Catena Media
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mulberry and Catena is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC 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 Mulberry Group 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 Mulberry Group PLC 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 Mulberry Group i.e., Mulberry Group and Catena Media go up and down completely randomly.
Pair Corralation between Mulberry Group and Catena Media
Assuming the 90 days trading horizon Mulberry Group PLC is expected to generate 1.05 times more return on investment than Catena Media. However, Mulberry Group is 1.05 times more volatile than Catena Media PLC. It trades about -0.1 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.17 per unit of risk. If you would invest 11,000 in Mulberry Group PLC on September 1, 2024 and sell it today you would lose (1,150) from holding Mulberry Group PLC or give up 10.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mulberry Group PLC vs. Catena Media PLC
Performance |
| Timeline |
| Mulberry Group PLC |
| Catena Media PLC |
Mulberry Group and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Catena Media
The main advantage of trading using opposite Mulberry Group and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group 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.| Mulberry Group vs. Auto Trader Group | Mulberry Group vs. Diversified Energy | Mulberry Group vs. Air Products Chemicals | Mulberry Group vs. Lowland Investment Co |
| Catena Media vs. Uniper SE | Catena Media vs. Mulberry Group PLC | Catena Media vs. London Security Plc | Catena Media vs. Triad Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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