Correlation Between Catalyst Media and Viridian Therapeutics
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Viridian Therapeutics 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 Viridian Therapeutics 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 Viridian Therapeutics, you can compare the effects of market volatilities on Catalyst Media and Viridian Therapeutics 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 Viridian Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Viridian Therapeutics.
Diversification Opportunities for Catalyst Media and Viridian Therapeutics
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst and Viridian is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Viridian Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viridian Therapeutics 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 Viridian Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viridian Therapeutics has no effect on the direction of Catalyst Media i.e., Catalyst Media and Viridian Therapeutics go up and down completely randomly.
Pair Corralation between Catalyst Media and Viridian Therapeutics
Assuming the 90 days trading horizon Catalyst Media is expected to generate 38.25 times less return on investment than Viridian Therapeutics. But when comparing it to its historical volatility, Catalyst Media Group is 2.43 times less risky than Viridian Therapeutics. It trades about 0.0 of its potential returns per unit of risk. Viridian Therapeutics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,868 in Viridian Therapeutics on September 3, 2024 and sell it today you would lose (686.00) from holding Viridian Therapeutics or give up 23.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.16% |
| Values | Daily Returns |
Catalyst Media Group vs. Viridian Therapeutics
Performance |
| Timeline |
| Catalyst Media Group |
| Viridian Therapeutics |
Catalyst Media and Viridian Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Viridian Therapeutics
The main advantage of trading using opposite Catalyst Media and Viridian Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Viridian Therapeutics 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 Viridian Therapeutics will offset losses from the drop in Viridian Therapeutics' 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 |
| Viridian Therapeutics vs. MediaZest plc | Viridian Therapeutics vs. Catalyst Media Group | Viridian Therapeutics vs. Centaur Media | Viridian Therapeutics vs. XLMedia PLC |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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