Correlation Between Catalyst Media and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Prosiebensat 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 Prosiebensat 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 Prosiebensat 1 Media, you can compare the effects of market volatilities on Catalyst Media and Prosiebensat 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 Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Prosiebensat.
Diversification Opportunities for Catalyst Media and Prosiebensat
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catalyst and Prosiebensat is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media 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 Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of Catalyst Media i.e., Catalyst Media and Prosiebensat go up and down completely randomly.
Pair Corralation between Catalyst Media and Prosiebensat
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.53 times more return on investment than Prosiebensat. However, Catalyst Media Group is 1.89 times less risky than Prosiebensat. It trades about -0.01 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.01 per unit of risk. If you would invest 10,250 in Catalyst Media Group on August 27, 2024 and sell it today you would lose (600.00) from holding Catalyst Media Group or give up 5.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Catalyst Media Group |
| Prosiebensat 1 Media |
Catalyst Media and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Prosiebensat
The main advantage of trading using opposite Catalyst Media and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.| Catalyst Media vs. Toyota Motor Corp | Catalyst Media vs. SoftBank Group Corp | Catalyst Media vs. Fannie Mae | Catalyst Media vs. State Bank of |
| Prosiebensat vs. Samsung Electronics Co | Prosiebensat vs. Samsung Electronics Co | Prosiebensat vs. Hyundai Motor | Prosiebensat vs. Toyota Motor Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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