Correlation Between AiMedia Technologies and Catalyst Metals
Can any of the company-specific risk be diversified away by investing in both AiMedia Technologies and Catalyst Metals 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 AiMedia Technologies and Catalyst Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AiMedia Technologies and Catalyst Metals, you can compare the effects of market volatilities on AiMedia Technologies and Catalyst Metals 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 AiMedia Technologies with a short position of Catalyst Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AiMedia Technologies and Catalyst Metals.
Diversification Opportunities for AiMedia Technologies and Catalyst Metals
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AiMedia and Catalyst is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding AiMedia Technologies and Catalyst Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Metals and AiMedia Technologies 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 AiMedia Technologies are associated (or correlated) with Catalyst Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Metals has no effect on the direction of AiMedia Technologies i.e., AiMedia Technologies and Catalyst Metals go up and down completely randomly.
Pair Corralation between AiMedia Technologies and Catalyst Metals
Assuming the 90 days trading horizon AiMedia Technologies is expected to generate 1.06 times less return on investment than Catalyst Metals. But when comparing it to its historical volatility, AiMedia Technologies is 1.18 times less risky than Catalyst Metals. It trades about 0.07 of its potential returns per unit of risk. Catalyst Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 116.00 in Catalyst Metals on September 3, 2024 and sell it today you would earn a total of 153.00 from holding Catalyst Metals or generate 131.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AiMedia Technologies vs. Catalyst Metals
Performance |
| Timeline |
| AiMedia Technologies |
| Catalyst Metals |
AiMedia Technologies and Catalyst Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AiMedia Technologies and Catalyst Metals
The main advantage of trading using opposite AiMedia Technologies and Catalyst Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AiMedia Technologies position performs unexpectedly, Catalyst Metals 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 Metals will offset losses from the drop in Catalyst Metals' long position.| AiMedia Technologies vs. Encounter Resources | AiMedia Technologies vs. Tlou Energy | AiMedia Technologies vs. Superior Resources | AiMedia Technologies vs. Peel Mining |
| Catalyst Metals vs. Northern Star Resources | Catalyst Metals vs. Evolution Mining | Catalyst Metals vs. Bluescope Steel | Catalyst Metals vs. Aneka Tambang Tbk |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |