Correlation Between Catalyst Media and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Nordic Semiconductor 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 Nordic Semiconductor 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 Nordic Semiconductor ASA, you can compare the effects of market volatilities on Catalyst Media and Nordic Semiconductor 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 Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Nordic Semiconductor.
Diversification Opportunities for Catalyst Media and Nordic Semiconductor
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catalyst and Nordic is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Nordic Semiconductor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Semiconductor ASA 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 Nordic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Semiconductor ASA has no effect on the direction of Catalyst Media i.e., Catalyst Media and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Catalyst Media and Nordic Semiconductor
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.5 times more return on investment than Nordic Semiconductor. However, Catalyst Media Group is 2.01 times less risky than Nordic Semiconductor. It trades about 0.06 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.13 per unit of risk. If you would invest 8,500 in Catalyst Media Group on September 3, 2024 and sell it today you would earn a total of 500.00 from holding Catalyst Media Group or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Catalyst Media Group |
| Nordic Semiconductor ASA |
Catalyst Media and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Nordic Semiconductor
The main advantage of trading using opposite Catalyst Media and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Nordic Semiconductor 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 Nordic Semiconductor will offset losses from the drop in Nordic Semiconductor's long position.| Catalyst Media vs. Smithson Investment Trust | Catalyst Media vs. Kinnevik Investment AB | Catalyst Media vs. New Residential Investment | Catalyst Media vs. The Mercantile Investment |
| Nordic Semiconductor vs. Catalyst Media Group | Nordic Semiconductor vs. CATLIN GROUP | Nordic Semiconductor vs. Tamburi Investment Partners | Nordic Semiconductor vs. Magnora ASA |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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