Correlation Between Catalyst Media and Amedeo Air

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Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Amedeo Air 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 Amedeo Air 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 Amedeo Air Four, you can compare the effects of market volatilities on Catalyst Media and Amedeo Air 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 Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Amedeo Air.

Diversification Opportunities for Catalyst Media and Amedeo Air

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Catalyst and Amedeo is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four 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 Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of Catalyst Media i.e., Catalyst Media and Amedeo Air go up and down completely randomly.

Pair Corralation between Catalyst Media and Amedeo Air

Assuming the 90 days trading horizon Catalyst Media is expected to generate 1.45 times less return on investment than Amedeo Air. In addition to that, Catalyst Media is 1.55 times more volatile than Amedeo Air Four. It trades about 0.13 of its total potential returns per unit of risk. Amedeo Air Four is currently generating about 0.29 per unit of volatility. If you would invest  3,639  in Amedeo Air Four on September 3, 2024 and sell it today you would earn a total of  1,681  from holding Amedeo Air Four or generate 46.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Catalyst Media Group  vs.  Amedeo Air Four

 Performance 
       Timeline  
Catalyst Media Group 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Media Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Catalyst Media may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Amedeo Air Four 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Amedeo Air Four are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Amedeo Air may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Catalyst Media and Amedeo Air Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Catalyst Media and Amedeo Air

The main advantage of trading using opposite Catalyst Media and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air's long position.
The idea behind Catalyst Media Group and Amedeo Air Four pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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