Correlation Between Catalyst Media and Avis Budget
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Avis Budget 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 Avis Budget 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 Avis Budget Group, you can compare the effects of market volatilities on Catalyst Media and Avis Budget 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 Avis Budget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Avis Budget.
Diversification Opportunities for Catalyst Media and Avis Budget
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst and Avis is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Avis Budget Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avis Budget Group 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 Avis Budget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avis Budget Group has no effect on the direction of Catalyst Media i.e., Catalyst Media and Avis Budget go up and down completely randomly.
Pair Corralation between Catalyst Media and Avis Budget
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the Avis Budget. In addition to that, Catalyst Media is 1.57 times more volatile than Avis Budget Group. It trades about -0.01 of its total potential returns per unit of risk. Avis Budget Group is currently generating about 0.4 per unit of volatility. If you would invest 8,085 in Avis Budget Group on November 3, 2024 and sell it today you would earn a total of 1,387 from holding Avis Budget Group or generate 17.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Avis Budget Group
Performance |
| Timeline |
| Catalyst Media Group |
| Avis Budget Group |
Catalyst Media and Avis Budget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Avis Budget
The main advantage of trading using opposite Catalyst Media and Avis Budget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Avis Budget 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 Avis Budget will offset losses from the drop in Avis Budget's long position.| Catalyst Media vs. Take Two Interactive Software | Catalyst Media vs. Scandic Hotels Group | Catalyst Media vs. Allianz Technology Trust | Catalyst Media vs. Roper Technologies |
| Avis Budget vs. BE Semiconductor Industries | Avis Budget vs. Fevertree Drinks Plc | Avis Budget vs. Ebro Foods | Avis Budget vs. Aptitude Software Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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