Correlation Between Catalyst Media and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Baillie Gifford 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 Baillie Gifford 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 Baillie Gifford European, you can compare the effects of market volatilities on Catalyst Media and Baillie Gifford 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 Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Baillie Gifford.
Diversification Opportunities for Catalyst Media and Baillie Gifford
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catalyst and Baillie is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Baillie Gifford European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford European 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 Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford European has no effect on the direction of Catalyst Media i.e., Catalyst Media and Baillie Gifford go up and down completely randomly.
Pair Corralation between Catalyst Media and Baillie Gifford
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the Baillie Gifford. But the stock apears to be less risky and, when comparing its historical volatility, Catalyst Media Group is 1.49 times less risky than Baillie Gifford. The stock trades about -0.21 of its potential returns per unit of risk. The Baillie Gifford European is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,580 in Baillie Gifford European on December 8, 2024 and sell it today you would earn a total of 310.00 from holding Baillie Gifford European or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Baillie Gifford European
Performance |
| Timeline |
| Catalyst Media Group |
| Baillie Gifford European |
Catalyst Media and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Baillie Gifford
The main advantage of trading using opposite Catalyst Media and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Catalyst Media vs. Wyndham Hotels Resorts | ||
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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