Correlation Between Comerica and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Comerica 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 Comerica and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Catalyst Media Group, you can compare the effects of market volatilities on Comerica 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 Comerica with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Catalyst Media.
Diversification Opportunities for Comerica and Catalyst Media
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Comerica and Catalyst is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Comerica 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 Comerica 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 Comerica 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 Comerica i.e., Comerica and Catalyst Media go up and down completely randomly.
Pair Corralation between Comerica and Catalyst Media
Assuming the 90 days trading horizon Comerica is expected to generate 1.24 times more return on investment than Catalyst Media. However, Comerica is 1.24 times more volatile than Catalyst Media Group. It trades about 0.26 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.41 per unit of risk. If you would invest 6,281 in Comerica on September 4, 2024 and sell it today you would earn a total of 870.00 from holding Comerica or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comerica vs. Catalyst Media Group
Performance |
| Timeline |
| Comerica |
| Catalyst Media Group |
Comerica and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comerica and Catalyst Media
The main advantage of trading using opposite Comerica and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica 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.| Comerica vs. Samsung Electronics Co | Comerica vs. Samsung Electronics Co | Comerica vs. Hyundai Motor | Comerica vs. Toyota Motor Corp |
| Catalyst Media vs. STMicroelectronics NV | Catalyst Media vs. TR Property Investment | Catalyst Media vs. Monks Investment Trust | Catalyst Media vs. Smithson Investment Trust |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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