Correlation Between Catena Media and Maven Wireless

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

Diversification Opportunities for Catena Media and Maven Wireless

0.6

Correlation Coefficient

Catena Media  Maven Wireless

Poor diversification

The 3 months correlation between Catena and Maven is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media plc and Maven Wireless Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maven Wireless Sweden 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 Maven Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maven Wireless Sweden has no effect on the direction of Catena Media i.e., Catena Media and Maven Wireless go up and down completely randomly.

Pair Corralation between Catena Media and Maven Wireless

Assuming the 90 days trading horizon Catena Media plc is expected to under-perform the Maven Wireless. In addition to that, Catena Media is 1.05 times more volatile than Maven Wireless Sweden. It trades about -0.15 of its total potential returns per unit of risk. Maven Wireless Sweden is currently generating about -0.03 per unit of volatility. If you would invest  1,030  in Maven Wireless Sweden on December 30, 2024 and sell it today you would lose (120.00) from holding Maven Wireless Sweden or give up 11.65% of portfolio value over 90 days.

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

Catena Media plc  vs.  Maven Wireless Sweden

Catena Media plc

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Maven Wireless Sweden

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maven Wireless Sweden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with Catena Media and Maven Wireless

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

The idea behind Catena Media plc and Maven Wireless Sweden 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 Commodity Directory module to find actively traded commodities issued by global exchanges.