Correlation Between Catalyst Media and ETC On
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and ETC On 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 ETC On 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 ETC on CMCI, you can compare the effects of market volatilities on Catalyst Media and ETC On 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 ETC On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and ETC On.
Diversification Opportunities for Catalyst Media and ETC On
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst and ETC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and ETC on CMCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC on CMCI 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 ETC On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC on CMCI has no effect on the direction of Catalyst Media i.e., Catalyst Media and ETC On go up and down completely randomly.
Pair Corralation between Catalyst Media and ETC On
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 2.23 times more return on investment than ETC On. However, Catalyst Media is 2.23 times more volatile than ETC on CMCI. It trades about 0.01 of its potential returns per unit of risk. ETC on CMCI is currently generating about 0.02 per unit of risk. If you would invest 9,680 in Catalyst Media Group on August 26, 2024 and sell it today you would lose (30.00) from holding Catalyst Media Group or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. ETC on CMCI
Performance |
| Timeline |
| Catalyst Media Group |
| ETC on CMCI |
Catalyst Media and ETC On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and ETC On
The main advantage of trading using opposite Catalyst Media and ETC On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, ETC On 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 ETC On will offset losses from the drop in ETC On's long position.| Catalyst Media vs. Toyota Motor Corp | Catalyst Media vs. SoftBank Group Corp | Catalyst Media vs. Fannie Mae | Catalyst Media vs. Panasonic Corp |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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