Correlation Between Catella AB and MTI Investment
Can any of the company-specific risk be diversified away by investing in both Catella AB and MTI Investment 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 Catella AB and MTI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catella AB A and MTI Investment SE, you can compare the effects of market volatilities on Catella AB and MTI Investment 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 Catella AB with a short position of MTI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catella AB and MTI Investment.
Diversification Opportunities for Catella AB and MTI Investment
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catella and MTI is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Catella AB A and MTI Investment SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Investment SE and Catella AB 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 Catella AB A are associated (or correlated) with MTI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Investment SE has no effect on the direction of Catella AB i.e., Catella AB and MTI Investment go up and down completely randomly.
Pair Corralation between Catella AB and MTI Investment
Assuming the 90 days trading horizon Catella AB A is expected to generate 1.0 times more return on investment than MTI Investment. However, Catella AB is 1.0 times more volatile than MTI Investment SE. It trades about 0.07 of its potential returns per unit of risk. MTI Investment SE is currently generating about -0.05 per unit of risk. If you would invest 2,600 in Catella AB A on December 29, 2024 and sell it today you would earn a total of 400.00 from holding Catella AB A or generate 15.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Catella AB A vs. MTI Investment SE
Performance |
Timeline |
Catella AB A |
MTI Investment SE |
Catella AB and MTI Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catella AB and MTI Investment
The main advantage of trading using opposite Catella AB and MTI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catella AB position performs unexpectedly, MTI Investment 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 MTI Investment will offset losses from the drop in MTI Investment's long position.Catella AB vs. L E Lundbergfretagen | Catella AB vs. Industrivarden AB ser | Catella AB vs. Svenska Handelsbanken AB | Catella AB vs. Investment AB Latour |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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