Correlation Between Miquel Y and Catenon SA

Can any of the company-specific risk be diversified away by investing in both Miquel Y and Catenon SA 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 Miquel Y and Catenon SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Miquel y Costas and Catenon SA, you can compare the effects of market volatilities on Miquel Y and Catenon SA 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 Miquel Y with a short position of Catenon SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miquel Y and Catenon SA.

Diversification Opportunities for Miquel Y and Catenon SA

0.24

Correlation Coefficient

Miquel Y  Catenon SA

Modest diversification

The 3 months correlation between Miquel and Catenon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Miquel y Costas and Catenon SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catenon SA and Miquel Y 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 Miquel y Costas are associated (or correlated) with Catenon SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catenon SA has no effect on the direction of Miquel Y i.e., Miquel Y and Catenon SA go up and down completely randomly.

Pair Corralation between Miquel Y and Catenon SA

Assuming the 90 days trading horizon Miquel Y is expected to generate 1.36 times less return on investment than Catenon SA. But when comparing it to its historical volatility, Miquel y Costas is 3.3 times less risky than Catenon SA. It trades about 0.06 of its potential returns per unit of risk. Catenon SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  66.00  in Catenon SA on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Catenon SA or generate 1.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Miquel y Costas  vs.  Catenon SA

Miquel y Costas

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Miquel y Costas are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Miquel Y is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Catenon SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Catenon SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Catenon SA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Miquel Y and Catenon SA

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

The idea behind Miquel y Costas and Catenon SA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.