Correlation Between Catalyst Media and International Business
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and International Business 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 International Business 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 International Business Machines, you can compare the effects of market volatilities on Catalyst Media and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and International Business.
Diversification Opportunities for Catalyst Media and International Business
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Catalyst and International is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Catalyst Media i.e., Catalyst Media and International Business go up and down completely randomly.
Pair Corralation between Catalyst Media and International Business
Assuming the 90 days trading horizon Catalyst Media is expected to generate 3.1 times less return on investment than International Business. But when comparing it to its historical volatility, Catalyst Media Group is 1.29 times less risky than International Business. It trades about 0.01 of its potential returns per unit of risk. International Business Machines is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,780 in International Business Machines on August 26, 2024 and sell it today you would earn a total of 1,115 from holding International Business Machines or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.0% |
| Values | Daily Returns |
Catalyst Media Group vs. International Business Machine
Performance |
| Timeline |
| Catalyst Media Group |
| International Business |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Catalyst Media and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and International Business
The main advantage of trading using opposite Catalyst Media and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Catalyst Media vs. Toyota Motor Corp | Catalyst Media vs. SoftBank Group Corp | Catalyst Media vs. Fannie Mae | Catalyst Media vs. Panasonic Corp |
| International Business vs. Westlake Chemical Corp | International Business vs. Charter Communications Cl | International Business vs. Global Net Lease | International Business vs. Capital Drilling |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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