Correlation Between Catena Media and Centaur Media
Can any of the company-specific risk be diversified away by investing in both Catena Media and Centaur 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 Centaur 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 Centaur Media, you can compare the effects of market volatilities on Catena Media and Centaur 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 Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Centaur Media.
Diversification Opportunities for Catena Media and Centaur Media
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catena and Centaur is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Catena Media i.e., Catena Media and Centaur Media go up and down completely randomly.
Pair Corralation between Catena Media and Centaur Media
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Centaur Media. In addition to that, Catena Media is 1.36 times more volatile than Centaur Media. It trades about -0.21 of its total potential returns per unit of risk. Centaur Media is currently generating about -0.16 per unit of volatility. If you would invest 3,039 in Centaur Media on September 6, 2024 and sell it today you would lose (839.00) from holding Centaur Media or give up 27.61% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.46% |
Values | Daily Returns |
Catena Media PLC vs. Centaur Media
Performance |
Timeline |
Catena Media PLC |
Centaur Media |
Catena Media and Centaur Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catena Media and Centaur Media
The main advantage of trading using opposite Catena Media and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Centaur 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 Centaur Media will offset losses from the drop in Centaur Media's long position.Catena Media vs. Hollywood Bowl Group | Catena Media vs. Summit Materials Cl | Catena Media vs. Cars Inc | Catena Media vs. One Media iP |
Centaur Media vs. Power Metal Resources | Centaur Media vs. Morgan Advanced Materials | Centaur Media vs. Panther Metals PLC | Centaur Media vs. Prosiebensat 1 Media |
Check out your portfolio center.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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