Correlation Between AB Sagax and Catena AB
Can any of the company-specific risk be diversified away by investing in both AB Sagax 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 AB Sagax and Catena AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Sagax and Catena AB, you can compare the effects of market volatilities on AB Sagax 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 AB Sagax with a short position of Catena AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Sagax and Catena AB.
Diversification Opportunities for AB Sagax and Catena AB
Almost no diversification
The 3 months correlation between SAGA-B and Catena is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding AB Sagax and Catena AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena AB and AB Sagax 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 AB Sagax 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 AB Sagax i.e., AB Sagax and Catena AB go up and down completely randomly.
Pair Corralation between AB Sagax and Catena AB
Assuming the 90 days trading horizon AB Sagax is expected to under-perform the Catena AB. But the stock apears to be less risky and, when comparing its historical volatility, AB Sagax is 1.0 times less risky than Catena AB. The stock trades about -0.32 of its potential returns per unit of risk. The Catena AB is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 51,175 in Catena AB on August 26, 2024 and sell it today you would lose (2,475) from holding Catena AB or give up 4.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Sagax vs. Catena AB
Performance |
| Timeline |
| AB Sagax |
| Catena AB |
AB Sagax and Catena AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Sagax and Catena AB
The main advantage of trading using opposite AB Sagax and Catena AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Sagax 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.| AB Sagax vs. Fastighets AB Balder | AB Sagax vs. Nyfosa AB | AB Sagax vs. Dios Fastigheter AB | AB Sagax vs. Corem Property Group |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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