Correlation Between Catella AB and Havsfrun Investment

Can any of the company-specific risk be diversified away by investing in both Catella AB and Havsfrun 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 Havsfrun Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catella AB and Havsfrun Investment AB, you can compare the effects of market volatilities on Catella AB and Havsfrun 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 Havsfrun Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catella AB and Havsfrun Investment.

Diversification Opportunities for Catella AB and Havsfrun Investment

-0.4

Correlation Coefficient

Catella AB  Havsfrun Investment

Very good diversification

The 3 months correlation between Catella and Havsfrun is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Catella AB and Havsfrun Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havsfrun Investment 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 are associated (or correlated) with Havsfrun Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havsfrun Investment has no effect on the direction of Catella AB i.e., Catella AB and Havsfrun Investment go up and down completely randomly.

Pair Corralation between Catella AB and Havsfrun Investment

Assuming the 90 days trading horizon Catella AB is expected to under-perform the Havsfrun Investment. But the stock apears to be less risky and, when comparing its historical volatility, Catella AB is 1.52 times less risky than Havsfrun Investment. The stock trades about 0.0 of its potential returns per unit of risk. The Havsfrun Investment AB is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,205  in Havsfrun Investment AB on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Havsfrun Investment AB or generate 8.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Catella AB  vs.  Havsfrun Investment AB

Catella AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catella AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Havsfrun Investment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Havsfrun Investment AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Havsfrun Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catella AB and Havsfrun Investment

The main advantage of trading using opposite Catella AB and Havsfrun Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catella AB position performs unexpectedly, Havsfrun 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 Havsfrun Investment will offset losses from the drop in Havsfrun Investment's long position.

The idea behind Catella AB and Havsfrun Investment AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.