Correlation Between Catalyst Media and Jost Werke
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Jost Werke 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 Jost Werke 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 Jost Werke AG, you can compare the effects of market volatilities on Catalyst Media and Jost Werke 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 Jost Werke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Jost Werke.
Diversification Opportunities for Catalyst Media and Jost Werke
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Catalyst and Jost is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Jost Werke AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jost Werke AG 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 Jost Werke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jost Werke AG has no effect on the direction of Catalyst Media i.e., Catalyst Media and Jost Werke go up and down completely randomly.
Pair Corralation between Catalyst Media and Jost Werke
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.77 times more return on investment than Jost Werke. However, Catalyst Media Group is 1.3 times less risky than Jost Werke. It trades about 0.02 of its potential returns per unit of risk. Jost Werke AG is currently generating about -0.02 per unit of risk. If you would invest 8,500 in Catalyst Media Group on September 12, 2024 and sell it today you would earn a total of 250.00 from holding Catalyst Media Group or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.85% |
| Values | Daily Returns |
Catalyst Media Group vs. Jost Werke AG
Performance |
| Timeline |
| Catalyst Media Group |
| Jost Werke AG |
Catalyst Media and Jost Werke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Jost Werke
The main advantage of trading using opposite Catalyst Media and Jost Werke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Jost Werke 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 Jost Werke will offset losses from the drop in Jost Werke's long position.| Catalyst Media vs. Charter Communications Cl | Catalyst Media vs. Cairo Communication SpA | Catalyst Media vs. Gamma Communications PLC | Catalyst Media vs. Lowland Investment Co |
| Jost Werke vs. Hong Kong Land | Jost Werke vs. Neometals | Jost Werke vs. Coor Service Management | Jost Werke vs. Fidelity Sustainable USD |
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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