Correlation Between Spotify Technology and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Spotify Technology 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 Spotify Technology and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and Catalyst Media Group, you can compare the effects of market volatilities on Spotify Technology 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 Spotify Technology with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Catalyst Media.
Diversification Opportunities for Spotify Technology and Catalyst Media
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Spotify and Catalyst is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA 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 Spotify Technology 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 Spotify Technology SA 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 Spotify Technology i.e., Spotify Technology and Catalyst Media go up and down completely randomly.
Pair Corralation between Spotify Technology and Catalyst Media
Assuming the 90 days trading horizon Spotify Technology SA is expected to generate 1.24 times more return on investment than Catalyst Media. However, Spotify Technology is 1.24 times more volatile than Catalyst Media Group. It trades about 0.29 of its potential returns per unit of risk. Catalyst Media Group is currently generating about 0.06 per unit of risk. If you would invest 30,300 in Spotify Technology SA on September 3, 2024 and sell it today you would earn a total of 14,845 from holding Spotify Technology SA or generate 48.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spotify Technology SA vs. Catalyst Media Group
Performance |
| Timeline |
| Spotify Technology |
| Catalyst Media Group |
Spotify Technology and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and Catalyst Media
The main advantage of trading using opposite Spotify Technology and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology 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.| Spotify Technology vs. Catalyst Media Group | Spotify Technology vs. CATLIN GROUP | Spotify Technology vs. Magnora ASA | Spotify Technology vs. RTW Venture Fund |
| Catalyst Media vs. Smithson Investment Trust | Catalyst Media vs. Kinnevik Investment AB | Catalyst Media vs. New Residential Investment | Catalyst Media vs. The Mercantile Investment |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |