Correlation Between Dios Fastigheter and Catena AB

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

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

Diversification Opportunities for Dios Fastigheter and Catena AB

0.95

Correlation Coefficient

Dios Fastigheter  Catena AB

Almost no diversification

The 3 months correlation between Dios and Catena is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Dios Fastigheter AB and Catena AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena AB and Dios Fastigheter 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 Dios Fastigheter AB are associated (or correlated) with Catena AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena AB has no effect on the direction of Dios Fastigheter i.e., Dios Fastigheter and Catena AB go up and down completely randomly.

Pair Corralation between Dios Fastigheter and Catena AB

Assuming the 90 days trading horizon Dios Fastigheter is expected to generate 1.18 times less return on investment than Catena AB. In addition to that, Dios Fastigheter is 1.09 times more volatile than Catena AB. It trades about 0.05 of its total potential returns per unit of risk. Catena AB is currently generating about 0.06 per unit of volatility. If you would invest  35,198  in Catena AB on September 12, 2024 and sell it today you would earn a total of  13,052  from holding Catena AB or generate 37.08% return on investment over 90 days.

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

Dios Fastigheter AB  vs.  Catena AB

Dios Fastigheter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dios Fastigheter 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.

Catena AB

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Dios Fastigheter and Catena AB

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

The idea behind Dios Fastigheter AB and Catena 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.