Correlation Between Catalyst Media and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement VE, you can compare the effects of market volatilities on Catalyst Media and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Veolia Environnement.
Diversification Opportunities for Catalyst Media and Veolia Environnement
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst and Veolia is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Catalyst Media i.e., Catalyst Media and Veolia Environnement go up and down completely randomly.
Pair Corralation between Catalyst Media and Veolia Environnement
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the Veolia Environnement. In addition to that, Catalyst Media is 2.87 times more volatile than Veolia Environnement VE. It trades about -0.01 of its total potential returns per unit of risk. Veolia Environnement VE is currently generating about 0.17 per unit of volatility. If you would invest 2,677 in Veolia Environnement VE on October 24, 2024 and sell it today you would earn a total of 91.00 from holding Veolia Environnement VE or generate 3.4% 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. Veolia Environnement VE
Performance |
| Timeline |
| Catalyst Media Group |
| Veolia Environnement |
Catalyst Media and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Veolia Environnement
The main advantage of trading using opposite Catalyst Media and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| Catalyst Media vs. Qurate Retail Series | Catalyst Media vs. Spirent Communications plc | Catalyst Media vs. Charter Communications Cl | Catalyst Media vs. Bloomsbury Publishing Plc |
| Veolia Environnement vs. AMG Advanced Metallurgical | Veolia Environnement vs. Cairn Homes PLC | Veolia Environnement vs. American Homes 4 | Veolia Environnement vs. Vitec Software Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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