Correlation Between Catcher Technology and Novatek Microelectronics
Can any of the company-specific risk be diversified away by investing in both Catcher Technology and Novatek Microelectronics 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 Catcher Technology and Novatek Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catcher Technology Co and Novatek Microelectronics Corp, you can compare the effects of market volatilities on Catcher Technology and Novatek Microelectronics 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 Catcher Technology with a short position of Novatek Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catcher Technology and Novatek Microelectronics.
Diversification Opportunities for Catcher Technology and Novatek Microelectronics
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catcher and Novatek is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Catcher Technology Co and Novatek Microelectronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novatek Microelectronics and Catcher 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 Catcher Technology Co are associated (or correlated) with Novatek Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novatek Microelectronics has no effect on the direction of Catcher Technology i.e., Catcher Technology and Novatek Microelectronics go up and down completely randomly.
Pair Corralation between Catcher Technology and Novatek Microelectronics
Assuming the 90 days trading horizon Catcher Technology Co is expected to generate 1.29 times more return on investment than Novatek Microelectronics. However, Catcher Technology is 1.29 times more volatile than Novatek Microelectronics Corp. It trades about 0.03 of its potential returns per unit of risk. Novatek Microelectronics Corp is currently generating about -0.15 per unit of risk. If you would invest 21,150 in Catcher Technology Co on January 21, 2025 and sell it today you would earn a total of 200.00 from holding Catcher Technology Co or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catcher Technology Co vs. Novatek Microelectronics Corp
Performance |
| Timeline |
| Catcher Technology |
| Novatek Microelectronics |
Catcher Technology and Novatek Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catcher Technology and Novatek Microelectronics
The main advantage of trading using opposite Catcher Technology and Novatek Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catcher Technology position performs unexpectedly, Novatek Microelectronics 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 Novatek Microelectronics will offset losses from the drop in Novatek Microelectronics' long position.| Catcher Technology vs. LARGAN Precision Co | Catcher Technology vs. Delta Electronics | Catcher Technology vs. Quanta Computer | Catcher Technology vs. Pegatron Corp |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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