Correlation Between Catalyst Media and Baring Emerging
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Baring Emerging 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 Baring Emerging 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 Baring Emerging Europe, you can compare the effects of market volatilities on Catalyst Media and Baring Emerging 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 Baring Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Baring Emerging.
Diversification Opportunities for Catalyst Media and Baring Emerging
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst and Baring is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Baring Emerging Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baring Emerging Europe 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 Baring Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baring Emerging Europe has no effect on the direction of Catalyst Media i.e., Catalyst Media and Baring Emerging go up and down completely randomly.
Pair Corralation between Catalyst Media and Baring Emerging
Assuming the 90 days trading horizon Catalyst Media is expected to generate 3.55 times less return on investment than Baring Emerging. In addition to that, Catalyst Media is 1.34 times more volatile than Baring Emerging Europe. It trades about 0.01 of its total potential returns per unit of risk. Baring Emerging Europe is currently generating about 0.04 per unit of volatility. If you would invest 50,234 in Baring Emerging Europe on August 27, 2024 and sell it today you would earn a total of 11,766 from holding Baring Emerging Europe or generate 23.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Catalyst Media Group vs. Baring Emerging Europe
Performance |
| Timeline |
| Catalyst Media Group |
| Baring Emerging Europe |
Catalyst Media and Baring Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Baring Emerging
The main advantage of trading using opposite Catalyst Media and Baring Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Baring Emerging 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 Baring Emerging will offset losses from the drop in Baring Emerging'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 |
| Baring Emerging vs. Catalyst Media Group | Baring Emerging vs. Oncimmune Holdings plc | Baring Emerging vs. Invesco Health Care | Baring Emerging vs. Coor Service Management |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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