Correlation Between Bloomsbury Publishing and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing 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 Bloomsbury Publishing and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and Catalyst Media Group, you can compare the effects of market volatilities on Bloomsbury Publishing 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 Bloomsbury Publishing with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and Catalyst Media.
Diversification Opportunities for Bloomsbury Publishing and Catalyst Media
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bloomsbury and Catalyst is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc 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 Bloomsbury Publishing 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 Bloomsbury Publishing Plc 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 Bloomsbury Publishing i.e., Bloomsbury Publishing and Catalyst Media go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and Catalyst Media
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to generate 0.76 times more return on investment than Catalyst Media. However, Bloomsbury Publishing Plc is 1.31 times less risky than Catalyst Media. It trades about -0.01 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.01 per unit of risk. If you would invest 67,200 in Bloomsbury Publishing Plc on November 3, 2024 and sell it today you would lose (600.00) from holding Bloomsbury Publishing Plc or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. Catalyst Media Group
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| Catalyst Media Group |
Bloomsbury Publishing and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and Catalyst Media
The main advantage of trading using opposite Bloomsbury Publishing and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing 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.| Bloomsbury Publishing vs. Sligro Food Group | Bloomsbury Publishing vs. Associated British Foods | Bloomsbury Publishing vs. Tyson Foods Cl | Bloomsbury Publishing vs. FC Investment Trust |
| Catalyst Media vs. Take Two Interactive Software | Catalyst Media vs. Scandic Hotels Group | Catalyst Media vs. Allianz Technology Trust | Catalyst Media vs. Roper Technologies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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