Correlation Between Catena Media and Media

Can any of the company-specific risk be diversified away by investing in both Catena Media and 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 Catena Media and Media 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 Media and Games, you can compare the effects of market volatilities on Catena Media and 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 Catena Media with a short position of Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Media.

Diversification Opportunities for Catena Media and Media

-0.84

Correlation Coefficient

Catena Media  Media

Pay attention - limited upside

The 3 months correlation between Catena and Media is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media plc and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Catena Media i.e., Catena Media and Media go up and down completely randomly.

Pair Corralation between Catena Media and Media

Assuming the 90 days trading horizon Catena Media plc is expected to under-perform the Media. In addition to that, Catena Media is 1.24 times more volatile than Media and Games. It trades about -0.17 of its total potential returns per unit of risk. Media and Games is currently generating about 0.09 per unit of volatility. If you would invest  3,455  in Media and Games on September 1, 2024 and sell it today you would earn a total of  645.00  from holding Media and Games or generate 18.67% return on investment over 90 days.

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

Catena Media plc  vs.  Media and Games

Catena Media plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catena Media plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Media and Games

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Media and Games are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catena Media and Media

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

The idea behind Catena Media plc and Media and Games 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 Global Correlations module to find global opportunities by holding instruments from different markets.