Correlation Between Catalyst Media and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Tyson Foods 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 Tyson Foods 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 Tyson Foods Cl, you can compare the effects of market volatilities on Catalyst Media and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Tyson Foods.
Diversification Opportunities for Catalyst Media and Tyson Foods
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst and Tyson is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Tyson Foods Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods Cl 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods Cl has no effect on the direction of Catalyst Media i.e., Catalyst Media and Tyson Foods go up and down completely randomly.
Pair Corralation between Catalyst Media and Tyson Foods
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 1.84 times more return on investment than Tyson Foods. However, Catalyst Media is 1.84 times more volatile than Tyson Foods Cl. It trades about 0.11 of its potential returns per unit of risk. Tyson Foods Cl is currently generating about -0.01 per unit of risk. If you would invest 7,125 in Catalyst Media Group on November 6, 2024 and sell it today you would earn a total of 375.00 from holding Catalyst Media Group or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Tyson Foods Cl
Performance |
| Timeline |
| Catalyst Media Group |
| Tyson Foods Cl |
Catalyst Media and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Tyson Foods
The main advantage of trading using opposite Catalyst Media and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Catalyst Media vs. Alliance Data Systems | Catalyst Media vs. Software Circle plc | Catalyst Media vs. Public Storage | Catalyst Media vs. Xeros Technology Group |
| Tyson Foods vs. Samsung Electronics Co | Tyson Foods vs. Samsung Electronics Co | Tyson Foods vs. Toyota Motor Corp | Tyson Foods vs. Reliance Industries Ltd |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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