Correlation Between Catalyst Media and National Beverage
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and National Beverage 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 National Beverage 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 National Beverage Corp, you can compare the effects of market volatilities on Catalyst Media and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and National Beverage.
Diversification Opportunities for Catalyst Media and National Beverage
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst and National is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Catalyst Media i.e., Catalyst Media and National Beverage go up and down completely randomly.
Pair Corralation between Catalyst Media and National Beverage
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the National Beverage. In addition to that, Catalyst Media is 1.22 times more volatile than National Beverage Corp. It trades about -0.41 of its total potential returns per unit of risk. National Beverage Corp is currently generating about 0.19 per unit of volatility. If you would invest 4,662 in National Beverage Corp on September 3, 2024 and sell it today you would earn a total of 300.00 from holding National Beverage Corp or generate 6.44% 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. National Beverage Corp
Performance |
| Timeline |
| Catalyst Media Group |
| National Beverage Corp |
Catalyst Media and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and National Beverage
The main advantage of trading using opposite Catalyst Media and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage'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 |
| National Beverage vs. Catalyst Media Group | National Beverage vs. CATLIN GROUP | National Beverage vs. Magnora ASA | National Beverage 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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