Correlation Between Baring Emerging and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Baring Emerging 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 Baring Emerging and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baring Emerging Europe and Catalyst Media Group, you can compare the effects of market volatilities on Baring Emerging 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 Baring Emerging with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baring Emerging and Catalyst Media.
Diversification Opportunities for Baring Emerging and Catalyst Media
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baring and Catalyst is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Baring Emerging Europe 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 Baring Emerging 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 Baring Emerging Europe 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 Baring Emerging i.e., Baring Emerging and Catalyst Media go up and down completely randomly.
Pair Corralation between Baring Emerging and Catalyst Media
Assuming the 90 days trading horizon Baring Emerging Europe is expected to generate 0.61 times more return on investment than Catalyst Media. However, Baring Emerging Europe is 1.65 times less risky than Catalyst Media. It trades about 0.11 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 58,250 in Baring Emerging Europe on August 31, 2024 and sell it today you would earn a total of 4,250 from holding Baring Emerging Europe or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baring Emerging Europe vs. Catalyst Media Group
Performance |
| Timeline |
| Baring Emerging Europe |
| Catalyst Media Group |
Baring Emerging and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baring Emerging and Catalyst Media
The main advantage of trading using opposite Baring Emerging and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baring Emerging 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.| Baring Emerging vs. Invesco Physical Silver | Baring Emerging vs. iShares Physical Silver | Baring Emerging vs. Greenroc Mining PLC | Baring Emerging vs. McEwen Mining |
| Catalyst Media vs. Aurora Investment Trust | Catalyst Media vs. Panther Metals PLC | Catalyst Media vs. Taylor Maritime Investments | Catalyst Media vs. JB Hunt Transport |
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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