Correlation Between Catalyst Media and CVS Health
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and CVS Health 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 CVS Health 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 CVS Health Corp, you can compare the effects of market volatilities on Catalyst Media and CVS Health 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 CVS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and CVS Health.
Diversification Opportunities for Catalyst Media and CVS Health
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Catalyst and CVS is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and CVS Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS Health Corp 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 CVS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS Health Corp has no effect on the direction of Catalyst Media i.e., Catalyst Media and CVS Health go up and down completely randomly.
Pair Corralation between Catalyst Media and CVS Health
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.63 times more return on investment than CVS Health. However, Catalyst Media Group is 1.6 times less risky than CVS Health. It trades about -0.3 of its potential returns per unit of risk. CVS Health Corp is currently generating about -0.64 per unit of risk. If you would invest 9,000 in Catalyst Media Group on September 24, 2024 and sell it today you would lose (750.00) from holding Catalyst Media Group or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. CVS Health Corp
Performance |
| Timeline |
| Catalyst Media Group |
| CVS Health Corp |
Catalyst Media and CVS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and CVS Health
The main advantage of trading using opposite Catalyst Media and CVS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, CVS Health 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 CVS Health will offset losses from the drop in CVS Health's long position.| Catalyst Media vs. mobilezone holding AG | Catalyst Media vs. Darden Restaurants | Catalyst Media vs. Charter Communications Cl | Catalyst Media vs. AIM ImmunoTech |
| CVS Health vs. G5 Entertainment AB | CVS Health vs. Catalyst Media Group | CVS Health vs. Auction Technology Group | CVS Health vs. Pfeiffer Vacuum Technology |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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