Correlation Between Catalyst Media and Biotech Growth
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Biotech Growth 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 Biotech Growth 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 The Biotech Growth, you can compare the effects of market volatilities on Catalyst Media and Biotech Growth 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 Biotech Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Biotech Growth.
Diversification Opportunities for Catalyst Media and Biotech Growth
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalyst and Biotech is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and The Biotech Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotech Growth 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 Biotech Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotech Growth has no effect on the direction of Catalyst Media i.e., Catalyst Media and Biotech Growth go up and down completely randomly.
Pair Corralation between Catalyst Media and Biotech Growth
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the Biotech Growth. In addition to that, Catalyst Media is 2.16 times more volatile than The Biotech Growth. It trades about -0.01 of its total potential returns per unit of risk. The Biotech Growth is currently generating about 0.02 per unit of volatility. If you would invest 86,300 in The Biotech Growth on October 29, 2024 and sell it today you would earn a total of 400.00 from holding The Biotech Growth or generate 0.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Catalyst Media Group vs. The Biotech Growth
Performance |
Timeline |
Catalyst Media Group |
Biotech Growth |
Catalyst Media and Biotech Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catalyst Media and Biotech Growth
The main advantage of trading using opposite Catalyst Media and Biotech Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Biotech Growth 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 Biotech Growth will offset losses from the drop in Biotech Growth's long position.Catalyst Media vs. Eastinco Mining Exploration | Catalyst Media vs. Empire Metals Limited | Catalyst Media vs. Thor Mining PLC | Catalyst Media vs. Wheaton Precious Metals |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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