Correlation Between Catalyst Media and Iron Mountain
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Iron Mountain 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 Iron Mountain 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 Iron Mountain, you can compare the effects of market volatilities on Catalyst Media and Iron Mountain 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 Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Iron Mountain.
Diversification Opportunities for Catalyst Media and Iron Mountain
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst and Iron is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Iron Mountain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of Catalyst Media i.e., Catalyst Media and Iron Mountain go up and down completely randomly.
Pair Corralation between Catalyst Media and Iron Mountain
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 1.11 times more return on investment than Iron Mountain. However, Catalyst Media is 1.11 times more volatile than Iron Mountain. It trades about -0.08 of its potential returns per unit of risk. Iron Mountain is currently generating about -0.1 per unit of risk. If you would invest 9,500 in Catalyst Media Group on August 28, 2024 and sell it today you would lose (500.00) from holding Catalyst Media Group or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Iron Mountain
Performance |
| Timeline |
| Catalyst Media Group |
| Iron Mountain |
Catalyst Media and Iron Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Iron Mountain
The main advantage of trading using opposite Catalyst Media and Iron Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Iron Mountain 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 Iron Mountain will offset losses from the drop in Iron Mountain's long position.| Catalyst Media vs. Toyota Motor Corp | Catalyst Media vs. SoftBank Group Corp | Catalyst Media vs. Fannie Mae | Catalyst Media vs. State Bank of |
| Iron Mountain vs. AcadeMedia AB | Iron Mountain vs. One Media iP | Iron Mountain vs. Catalyst Media Group | Iron Mountain vs. Beazer Homes USA |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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