Correlation Between Fannie Mae and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Fannie Mae 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 Fannie Mae and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fannie Mae and Catalyst Media Group, you can compare the effects of market volatilities on Fannie Mae 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 Fannie Mae with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fannie Mae and Catalyst Media.
Diversification Opportunities for Fannie Mae and Catalyst Media
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fannie and Catalyst is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fannie Mae 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 Fannie Mae 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 Fannie Mae 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 Fannie Mae i.e., Fannie Mae and Catalyst Media go up and down completely randomly.
Pair Corralation between Fannie Mae and Catalyst Media
Assuming the 90 days trading horizon Fannie Mae is expected to generate 3.45 times more return on investment than Catalyst Media. However, Fannie Mae is 3.45 times more volatile than Catalyst Media Group. It trades about 0.15 of its potential returns per unit of risk. Catalyst Media Group is currently generating about 0.01 per unit of risk. If you would invest 74.00 in Fannie Mae on August 25, 2024 and sell it today you would earn a total of 250.00 from holding Fannie Mae or generate 337.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 71.06% |
| Values | Daily Returns |
Fannie Mae vs. Catalyst Media Group
Performance |
| Timeline |
| Fannie Mae |
| Catalyst Media Group |
Fannie Mae and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fannie Mae and Catalyst Media
The main advantage of trading using opposite Fannie Mae and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fannie Mae 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.| Fannie Mae vs. Samsung Electronics Co | Fannie Mae vs. Samsung Electronics Co | Fannie Mae vs. Hyundai Motor | Fannie Mae vs. Toyota Motor Corp |
| Catalyst Media vs. Toyota Motor Corp | Catalyst Media vs. SoftBank Group Corp | Catalyst Media vs. Fannie Mae | Catalyst Media vs. Panasonic Corp |
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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