Correlation Between Catenon SA and Arteche Lantegi

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

By analyzing existing cross correlation between Catenon SA and Arteche Lantegi Elkartea, you can compare the effects of market volatilities on Catenon SA and Arteche Lantegi 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 Catenon SA with a short position of Arteche Lantegi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catenon SA and Arteche Lantegi.

Diversification Opportunities for Catenon SA and Arteche Lantegi

0.36

Correlation Coefficient

Catenon SA  Arteche Lantegi

Weak diversification

The 3 months correlation between Catenon and Arteche is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Catenon SA and Arteche Lantegi Elkartea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arteche Lantegi Elkartea and Catenon SA 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 Catenon SA are associated (or correlated) with Arteche Lantegi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arteche Lantegi Elkartea has no effect on the direction of Catenon SA i.e., Catenon SA and Arteche Lantegi go up and down completely randomly.

Pair Corralation between Catenon SA and Arteche Lantegi

Assuming the 90 days trading horizon Catenon SA is expected to under-perform the Arteche Lantegi. But the stock apears to be less risky and, when comparing its historical volatility, Catenon SA is 1.06 times less risky than Arteche Lantegi. The stock trades about -0.02 of its potential returns per unit of risk. The Arteche Lantegi Elkartea is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  925.00  in Arteche Lantegi Elkartea on May 21, 2025 and sell it today you would earn a total of  395.00  from holding Arteche Lantegi Elkartea or generate 42.7% return on investment over 90 days.

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

Catenon SA  vs.  Arteche Lantegi Elkartea

Catenon SA

Risk-Adjusted Performance

Weakest

Over the last 90 days Catenon SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Catenon SA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Arteche Lantegi Elkartea

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arteche Lantegi Elkartea are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Arteche Lantegi exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catenon SA and Arteche Lantegi

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

The idea behind Catenon SA and Arteche Lantegi Elkartea 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.