Correlation Between Catena Media and Sydbank
Can any of the company-specific risk be diversified away by investing in both Catena Media and Sydbank 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 Catena Media and Sydbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena Media PLC and Sydbank, you can compare the effects of market volatilities on Catena Media and Sydbank 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 Catena Media with a short position of Sydbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Sydbank.
Diversification Opportunities for Catena Media and Sydbank
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catena and Sydbank is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and Sydbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank and Catena Media 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 Catena Media PLC are associated (or correlated) with Sydbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank has no effect on the direction of Catena Media i.e., Catena Media and Sydbank go up and down completely randomly.
Pair Corralation between Catena Media and Sydbank
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Sydbank. In addition to that, Catena Media is 3.15 times more volatile than Sydbank. It trades about -0.04 of its total potential returns per unit of risk. Sydbank is currently generating about 0.23 per unit of volatility. If you would invest 34,980 in Sydbank on November 29, 2024 and sell it today you would earn a total of 10,050 from holding Sydbank or generate 28.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Catena Media PLC vs. Sydbank
Performance |
Timeline |
Catena Media PLC |
Sydbank |
Catena Media and Sydbank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catena Media and Sydbank
The main advantage of trading using opposite Catena Media and Sydbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Sydbank 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 Sydbank will offset losses from the drop in Sydbank's long position.Catena Media vs. Kinnevik Investment AB | Catena Media vs. Zoom Video Communications | Catena Media vs. Coor Service Management | Catena Media vs. Litigation Capital Management |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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