Correlation Between CATLIN GROUP and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP 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 CATLIN GROUP and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Catalyst Media Group, you can compare the effects of market volatilities on CATLIN GROUP 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 CATLIN GROUP with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Catalyst Media.
Diversification Opportunities for CATLIN GROUP and Catalyst Media
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CATLIN and Catalyst is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP 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 CATLIN GROUP 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 CATLIN GROUP 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 CATLIN GROUP i.e., CATLIN GROUP and Catalyst Media go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Catalyst Media
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 0.92 times more return on investment than Catalyst Media. However, CATLIN GROUP is 1.09 times less risky than Catalyst Media. It trades about 0.04 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 7,200 in CATLIN GROUP on August 29, 2024 and sell it today you would earn a total of 2,300 from holding CATLIN GROUP or generate 31.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
CATLIN GROUP vs. Catalyst Media Group
Performance |
| Timeline |
| CATLIN GROUP |
| Catalyst Media Group |
CATLIN GROUP and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Catalyst Media
The main advantage of trading using opposite CATLIN GROUP and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP 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.| CATLIN GROUP vs. Europa Metals | CATLIN GROUP vs. BW Offshore | CATLIN GROUP vs. Solstad Offshore ASA | CATLIN GROUP vs. Wheaton Precious Metals |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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