Correlation Between Bunzl PLC and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Bunzl PLC 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 Bunzl PLC and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunzl PLC and Catalyst Media Group, you can compare the effects of market volatilities on Bunzl PLC 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 Bunzl PLC with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunzl PLC and Catalyst Media.
Diversification Opportunities for Bunzl PLC and Catalyst Media
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bunzl and Catalyst is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bunzl 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 Bunzl PLC 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 Bunzl 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 Bunzl PLC i.e., Bunzl PLC and Catalyst Media go up and down completely randomly.
Pair Corralation between Bunzl PLC and Catalyst Media
Assuming the 90 days trading horizon Bunzl PLC is expected to generate 0.58 times more return on investment than Catalyst Media. However, Bunzl PLC is 1.72 times less risky than Catalyst Media. It trades about 0.05 of its potential returns per unit of risk. Catalyst Media Group is currently generating about 0.0 per unit of risk. If you would invest 287,259 in Bunzl PLC on September 4, 2024 and sell it today you would earn a total of 72,541 from holding Bunzl PLC or generate 25.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bunzl PLC vs. Catalyst Media Group
Performance |
| Timeline |
| Bunzl PLC |
| Catalyst Media Group |
Bunzl PLC and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bunzl PLC and Catalyst Media
The main advantage of trading using opposite Bunzl PLC and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunzl PLC 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.| Bunzl PLC vs. Catalyst Media Group | Bunzl PLC vs. CATLIN GROUP | Bunzl PLC vs. Tamburi Investment Partners | Bunzl PLC vs. Magnora ASA |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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