Correlation Between Catena AB and Rottneros

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

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

Diversification Opportunities for Catena AB and Rottneros

-0.72

Correlation Coefficient

Catena AB  Rottneros

Pay attention - limited upside

The 3 months correlation between Catena and Rottneros is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Catena AB and Rottneros AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rottneros AB 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 Rottneros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rottneros AB has no effect on the direction of Catena AB i.e., Catena AB and Rottneros go up and down completely randomly.

Pair Corralation between Catena AB and Rottneros

Assuming the 90 days trading horizon Catena AB is expected to generate 0.34 times more return on investment than Rottneros. However, Catena AB is 2.91 times less risky than Rottneros. It trades about 0.07 of its potential returns per unit of risk. Rottneros AB is currently generating about -0.28 per unit of risk. If you would invest  44,085  in Catena AB on April 22, 2025 and sell it today you would earn a total of  2,195  from holding Catena AB or generate 4.98% 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.  Rottneros AB

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.

Rottneros AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rottneros AB 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 Rottneros

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

The idea behind Catena AB and Rottneros AB 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .