Correlation Between Small Cap and Catalystsmh High
Can any of the company-specific risk be diversified away by investing in both Small Cap and Catalystsmh High 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 Small Cap and Catalystsmh High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Value and Catalystsmh High Income, you can compare the effects of market volatilities on Small Cap and Catalystsmh High 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 Small Cap with a short position of Catalystsmh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Catalystsmh High.
Diversification Opportunities for Small Cap and Catalystsmh High
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMALL and Catalystsmh is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Value and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High Income and Small Cap 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 Small Cap Value are associated (or correlated) with Catalystsmh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of Small Cap i.e., Small Cap and Catalystsmh High go up and down completely randomly.
Pair Corralation between Small Cap and Catalystsmh High
Assuming the 90 days horizon Small Cap Value is expected to generate 3.11 times more return on investment than Catalystsmh High. However, Small Cap is 3.11 times more volatile than Catalystsmh High Income. It trades about 0.15 of its potential returns per unit of risk. Catalystsmh High Income is currently generating about 0.14 per unit of risk. If you would invest 1,044 in Small Cap Value on November 4, 2024 and sell it today you would earn a total of 29.00 from holding Small Cap Value or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Value vs. Catalystsmh High Income
Performance |
| Timeline |
| Small Cap Value |
| Catalystsmh High Income |
Small Cap and Catalystsmh High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Catalystsmh High
The main advantage of trading using opposite Small Cap and Catalystsmh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Catalystsmh High 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 Catalystsmh High will offset losses from the drop in Catalystsmh High's long position.| Small Cap vs. Value Fund Investor | Small Cap vs. Small Pany Fund | Small Cap vs. Mid Cap Value | Small Cap vs. Equity Income Fund |
| Catalystsmh High vs. Small Pany Growth | Catalystsmh High vs. Fxybjx | Catalystsmh High vs. Fkhemx | Catalystsmh High vs. Tax Managed Large Cap |
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.
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