Correlation Between XMReality and Catena Media
Can any of the company-specific risk be diversified away by investing in both XMReality 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 XMReality and Catena Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XMReality AB and Catena Media plc, you can compare the effects of market volatilities on XMReality 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 XMReality with a short position of Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of XMReality and Catena Media.
Diversification Opportunities for XMReality and Catena Media
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XMReality and Catena is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding XMReality 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 XMReality 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 XMReality 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 XMReality i.e., XMReality and Catena Media go up and down completely randomly.
Pair Corralation between XMReality and Catena Media
Assuming the 90 days trading horizon XMReality AB is expected to generate 1.05 times more return on investment than Catena Media. However, XMReality is 1.05 times more volatile than Catena Media plc. It trades about -0.05 of its potential returns per unit of risk. Catena Media plc is currently generating about -0.1 per unit of risk. If you would invest 2.20 in XMReality AB on August 25, 2024 and sell it today you would lose (0.20) from holding XMReality AB or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XMReality AB vs. Catena Media plc
Performance |
| Timeline |
| XMReality AB |
| Catena Media plc |
XMReality and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XMReality and Catena Media
The main advantage of trading using opposite XMReality and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XMReality 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.| XMReality vs. Tangiamo Touch Technology | XMReality vs. Zaplox AB | XMReality vs. Alligator Bioscience AB | XMReality vs. Garo AB |
| Catena Media vs. XMReality AB | Catena Media vs. Enersize Oy | Catena Media vs. Mavshack publ AB | Catena Media vs. Serstech 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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