Correlation Between Interpublic Group and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Interpublic Group 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 Interpublic Group and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interpublic Group of and Catalyst Media Group, you can compare the effects of market volatilities on Interpublic Group 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 Interpublic Group with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interpublic Group and Catalyst Media.
Diversification Opportunities for Interpublic Group and Catalyst Media
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Interpublic and Catalyst is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Interpublic Group of 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 Interpublic Group 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 Interpublic Group of 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 Interpublic Group i.e., Interpublic Group and Catalyst Media go up and down completely randomly.
Pair Corralation between Interpublic Group and Catalyst Media
Assuming the 90 days trading horizon Interpublic Group of is expected to generate 0.92 times more return on investment than Catalyst Media. However, Interpublic Group of is 1.09 times less risky than Catalyst Media. It trades about 0.07 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 2,938 in Interpublic Group of on September 4, 2024 and sell it today you would earn a total of 75.00 from holding Interpublic Group of or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Interpublic Group of vs. Catalyst Media Group
Performance |
| Timeline |
| Interpublic Group |
| Catalyst Media Group |
Interpublic Group and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interpublic Group and Catalyst Media
The main advantage of trading using opposite Interpublic Group and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interpublic Group 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.| Interpublic Group vs. Kinnevik Investment AB | Interpublic Group vs. Public Storage | Interpublic Group vs. Extra Space Storage | Interpublic Group vs. FC Investment Trust |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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