Correlation Between Catena AB and Corem Property

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

By analyzing existing cross correlation between Catena AB and Corem Property Group, you can compare the effects of market volatilities on Catena AB and Corem Property 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 AB with a short position of Corem Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena AB and Corem Property.

Diversification Opportunities for Catena AB and Corem Property

0.47

Correlation Coefficient

Catena AB  Corem Property

Very weak diversification

The 3 months correlation between Catena and Corem is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and Corem Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corem Property Group and Catena 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 Catena AB are associated (or correlated) with Corem Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corem Property Group has no effect on the direction of Catena AB i.e., Catena AB and Corem Property go up and down completely randomly.

Pair Corralation between Catena AB and Corem Property

Assuming the 90 days trading horizon Catena AB is expected to generate 0.59 times more return on investment than Corem Property. However, Catena AB is 1.7 times less risky than Corem Property. It trades about -0.11 of its potential returns per unit of risk. Corem Property Group is currently generating about -0.19 per unit of risk. If you would invest  49,250  in Catena AB on December 1, 2024 and sell it today you would lose (4,650) from holding Catena AB or give up 9.44% of portfolio value over 90 days.

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

Catena AB  vs.  Corem Property Group

Catena AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catena 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.

Corem Property Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corem Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Catena AB and Corem Property

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

The idea behind Catena AB and Corem Property Group 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.