Correlation Between Catalyst Media and AcadeMedia
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and AcadeMedia 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 AcadeMedia 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 AcadeMedia AB, you can compare the effects of market volatilities on Catalyst Media and AcadeMedia 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 AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and AcadeMedia.
Diversification Opportunities for Catalyst Media and AcadeMedia
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catalyst and AcadeMedia is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB 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 AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Catalyst Media i.e., Catalyst Media and AcadeMedia go up and down completely randomly.
Pair Corralation between Catalyst Media and AcadeMedia
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the AcadeMedia. In addition to that, Catalyst Media is 2.59 times more volatile than AcadeMedia AB. It trades about -0.08 of its total potential returns per unit of risk. AcadeMedia AB is currently generating about -0.14 per unit of volatility. If you would invest 6,420 in AcadeMedia AB on August 27, 2024 and sell it today you would lose (215.00) from holding AcadeMedia AB or give up 3.35% 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. AcadeMedia AB
Performance |
| Timeline |
| Catalyst Media Group |
| AcadeMedia AB |
Catalyst Media and AcadeMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and AcadeMedia
The main advantage of trading using opposite Catalyst Media and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia'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 |
| AcadeMedia vs. Blackrock World Mining | AcadeMedia vs. Endeavour Mining Corp | AcadeMedia vs. JLEN Environmental Assets | AcadeMedia vs. Tata Steel Limited |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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