Correlation Between Catena AB and Arctic Gold

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

By analyzing existing cross correlation between Catena AB and Arctic Gold Publ, you can compare the effects of market volatilities on Catena AB and Arctic Gold 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 Arctic Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena AB and Arctic Gold.

Diversification Opportunities for Catena AB and Arctic Gold

-0.76

Correlation Coefficient

Catena AB  Arctic Gold

Pay attention - limited upside

The 3 months correlation between Catena and Arctic is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and Arctic Gold Publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Gold Publ 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 Arctic Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Gold Publ has no effect on the direction of Catena AB i.e., Catena AB and Arctic Gold go up and down completely randomly.

Pair Corralation between Catena AB and Arctic Gold

Assuming the 90 days trading horizon Catena AB is expected to generate 0.17 times more return on investment than Arctic Gold. However, Catena AB is 5.99 times less risky than Arctic Gold. It trades about 0.09 of its potential returns per unit of risk. Arctic Gold Publ is currently generating about -0.06 per unit of risk. If you would invest  44,105  in Catena AB on April 23, 2025 and sell it today you would earn a total of  2,895  from holding Catena AB or generate 6.56% return on investment over 90 days.

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

Catena AB  vs.  Arctic Gold Publ

Catena AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Catena AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Catena AB may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Arctic Gold Publ

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arctic Gold Publ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Catena AB and Arctic Gold

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

The idea behind Catena AB and Arctic Gold Publ 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.