Correlation Between Catena AB and Byggmstare Anders

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

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

Diversification Opportunities for Catena AB and Byggmstare Anders

0.73

Correlation Coefficient

Catena AB  Byggmstare Anders

Poor diversification

The 3 months correlation between Catena and Byggmstare is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and Byggmstare Anders J in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggmstare Anders and Catena AB 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 AB are associated (or correlated) with Byggmstare Anders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggmstare Anders has no effect on the direction of Catena AB i.e., Catena AB and Byggmstare Anders go up and down completely randomly.

Pair Corralation between Catena AB and Byggmstare Anders

Assuming the 90 days trading horizon Catena AB is expected to generate 2.88 times less return on investment than Byggmstare Anders. But when comparing it to its historical volatility, Catena AB is 1.68 times less risky than Byggmstare Anders. It trades about 0.07 of its potential returns per unit of risk. Byggmstare Anders J is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  22,944  in Byggmstare Anders J on April 20, 2025 and sell it today you would earn a total of  3,456  from holding Byggmstare Anders J or generate 15.06% return on investment over 90 days.

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

Catena AB  vs.  Byggmstare Anders J

Catena AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Catena AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Catena AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Byggmstare Anders

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Byggmstare Anders J are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Byggmstare Anders unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catena AB and Byggmstare Anders

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

The idea behind Catena AB and Byggmstare Anders J 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.