Correlation Between United Internet and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both United Internet and Catalyst Media 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 United Internet and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Internet AG and Catalyst Media Group, you can compare the effects of market volatilities on United Internet and Catalyst Media 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 United Internet with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and Catalyst Media.
Diversification Opportunities for United Internet and Catalyst Media
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and Catalyst is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group and United Internet 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 United Internet AG are associated (or correlated) with Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of United Internet i.e., United Internet and Catalyst Media go up and down completely randomly.
Pair Corralation between United Internet and Catalyst Media
Assuming the 90 days trading horizon United Internet AG is expected to under-perform the Catalyst Media. In addition to that, United Internet is 1.4 times more volatile than Catalyst Media Group. It trades about -0.05 of its total potential returns per unit of risk. Catalyst Media Group is currently generating about -0.05 per unit of volatility. If you would invest 10,250 in Catalyst Media Group on September 20, 2024 and sell it today you would lose (2,000) from holding Catalyst Media Group or give up 19.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Internet AG vs. Catalyst Media Group
Performance |
| Timeline |
| United Internet AG |
| Catalyst Media Group |
United Internet and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and Catalyst Media
The main advantage of trading using opposite United Internet and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| United Internet vs. Samsung Electronics Co | United Internet vs. Samsung Electronics Co | United Internet vs. Hyundai Motor | United Internet vs. Reliance Industries Ltd |
| Catalyst Media vs. Zoom Video Communications | Catalyst Media vs. Batm Advanced Communications | Catalyst Media vs. United Internet AG | Catalyst Media vs. mobilezone holding AG |
Check out your portfolio center.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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