Correlation Between Catena AB and Logistea

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

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

Diversification Opportunities for Catena AB and Logistea

0.78

Correlation Coefficient

Catena AB  Logistea

Poor diversification

The 3 months correlation between Catena and Logistea is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and Logistea AB Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logistea AB Series 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 Logistea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logistea AB Series has no effect on the direction of Catena AB i.e., Catena AB and Logistea go up and down completely randomly.

Pair Corralation between Catena AB and Logistea

Assuming the 90 days trading horizon Catena AB is expected to generate 2.61 times less return on investment than Logistea. But when comparing it to its historical volatility, Catena AB is 1.56 times less risky than Logistea. It trades about 0.07 of its potential returns per unit of risk. Logistea AB Series is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,425  in Logistea AB Series on April 20, 2025 and sell it today you would earn a total of  197.00  from holding Logistea AB Series or generate 13.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Catena AB  vs.  Logistea AB Series

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.

Logistea AB Series

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Logistea AB Series are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Logistea sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catena AB and Logistea

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

The idea behind Catena AB and Logistea AB Series 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.