Correlation Between Catalyst Media and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Fresenius Medical 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 Fresenius Medical 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 Fresenius Medical Care, you can compare the effects of market volatilities on Catalyst Media and Fresenius Medical 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Fresenius Medical.
Diversification Opportunities for Catalyst Media and Fresenius Medical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Catalyst and Fresenius is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Catalyst Media i.e., Catalyst Media and Fresenius Medical go up and down completely randomly.
Pair Corralation between Catalyst Media and Fresenius Medical
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.84 times more return on investment than Fresenius Medical. However, Catalyst Media Group is 1.2 times less risky than Fresenius Medical. It trades about 0.13 of its potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.06 per unit of risk. If you would invest 7,000 in Catalyst Media Group on September 3, 2024 and sell it today you would earn a total of 2,000 from holding Catalyst Media Group or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Fresenius Medical Care
Performance |
| Timeline |
| Catalyst Media Group |
| Fresenius Medical Care |
Catalyst Media and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Fresenius Medical
The main advantage of trading using opposite Catalyst Media and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical'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 |
| Fresenius Medical vs. Catalyst Media Group | Fresenius Medical vs. CATLIN GROUP | Fresenius Medical vs. Magnora ASA | Fresenius Medical vs. RTW Venture Fund |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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