Correlation Between USWE Sports and Catena Media
Can any of the company-specific risk be diversified away by investing in both USWE Sports 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 USWE Sports and Catena Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE Sports AB and Catena Media plc, you can compare the effects of market volatilities on USWE Sports 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 USWE Sports with a short position of Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE Sports and Catena Media.
Diversification Opportunities for USWE Sports and Catena Media
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USWE and Catena is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding USWE Sports 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 USWE Sports 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 USWE Sports 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 USWE Sports i.e., USWE Sports and Catena Media go up and down completely randomly.
Pair Corralation between USWE Sports and Catena Media
Assuming the 90 days trading horizon USWE Sports AB is expected to generate 0.38 times more return on investment than Catena Media. However, USWE Sports AB is 2.67 times less risky than Catena Media. It trades about 0.13 of its potential returns per unit of risk. Catena Media plc is currently generating about -0.11 per unit of risk. If you would invest 875.00 in USWE Sports AB on September 3, 2024 and sell it today you would earn a total of 45.00 from holding USWE Sports AB or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE Sports AB vs. Catena Media plc
Performance |
| Timeline |
| USWE Sports AB |
| Catena Media plc |
USWE Sports and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE Sports and Catena Media
The main advantage of trading using opposite USWE Sports and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE Sports 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.| USWE Sports vs. Truecaller AB | USWE Sports vs. Dedicare AB | USWE Sports vs. RVRC Holding AB | USWE Sports vs. AddLife AB |
| Catena Media vs. Kambi Group PLC | Catena Media vs. Betsson AB | Catena Media vs. Evolution AB | Catena Media vs. Embracer Group 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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