Correlation Between Catalyst Media and Waste Management
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Waste Management 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 Waste Management 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 Waste Management, you can compare the effects of market volatilities on Catalyst Media and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Waste Management.
Diversification Opportunities for Catalyst Media and Waste Management
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst and Waste is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of Catalyst Media i.e., Catalyst Media and Waste Management go up and down completely randomly.
Pair Corralation between Catalyst Media and Waste Management
Assuming the 90 days trading horizon Catalyst Media is expected to generate 95.75 times less return on investment than Waste Management. In addition to that, Catalyst Media is 1.56 times more volatile than Waste Management. It trades about 0.0 of its total potential returns per unit of risk. Waste Management is currently generating about 0.07 per unit of volatility. If you would invest 16,208 in Waste Management on September 3, 2024 and sell it today you would earn a total of 6,752 from holding Waste Management or generate 41.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Catalyst Media Group vs. Waste Management
Performance |
| Timeline |
| Catalyst Media Group |
| Waste Management |
Catalyst Media and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Waste Management
The main advantage of trading using opposite Catalyst Media and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management'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 |
| Waste Management vs. Catalyst Media Group | Waste Management vs. CATLIN GROUP | Waste Management vs. Magnora ASA | Waste Management 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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