Correlation Between Catalyst Media and Surgical Science
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Surgical Science 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 Catalyst Media and Surgical Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Media Group and Surgical Science Sweden, you can compare the effects of market volatilities on Catalyst Media and Surgical Science 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 Catalyst Media with a short position of Surgical Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Surgical Science.
Diversification Opportunities for Catalyst Media and Surgical Science
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Catalyst and Surgical is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Surgical Science Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgical Science Sweden and Catalyst Media 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 Catalyst Media Group are associated (or correlated) with Surgical Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgical Science Sweden has no effect on the direction of Catalyst Media i.e., Catalyst Media and Surgical Science go up and down completely randomly.
Pair Corralation between Catalyst Media and Surgical Science
Assuming the 90 days trading horizon Catalyst Media is expected to generate 2.24 times less return on investment than Surgical Science. But when comparing it to its historical volatility, Catalyst Media Group is 1.87 times less risky than Surgical Science. It trades about 0.01 of its potential returns per unit of risk. Surgical Science Sweden is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 16,017 in Surgical Science Sweden on August 26, 2024 and sell it today you would lose (1,527) from holding Surgical Science Sweden or give up 9.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.62% |
| Values | Daily Returns |
Catalyst Media Group vs. Surgical Science Sweden
Performance |
| Timeline |
| Catalyst Media Group |
| Surgical Science Sweden |
Catalyst Media and Surgical Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Surgical Science
The main advantage of trading using opposite Catalyst Media and Surgical Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Surgical Science 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 Surgical Science will offset losses from the drop in Surgical Science's long position.| Catalyst Media vs. Toyota Motor Corp | Catalyst Media vs. SoftBank Group Corp | Catalyst Media vs. Fannie Mae | Catalyst Media vs. Panasonic Corp |
| Surgical Science vs. Samsung Electronics Co | Surgical Science vs. Samsung Electronics Co | Surgical Science vs. Hyundai Motor | Surgical Science vs. Toyota Motor Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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