Correlation Between Catalyst Media and Impax Asset
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Impax Asset 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 Impax Asset 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 Impax Asset Management, you can compare the effects of market volatilities on Catalyst Media and Impax Asset 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 Impax Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Impax Asset.
Diversification Opportunities for Catalyst Media and Impax Asset
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catalyst and Impax is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Impax Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Asset Management 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 Impax Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Asset Management has no effect on the direction of Catalyst Media i.e., Catalyst Media and Impax Asset go up and down completely randomly.
Pair Corralation between Catalyst Media and Impax Asset
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.6 times more return on investment than Impax Asset. However, Catalyst Media Group is 1.66 times less risky than Impax Asset. It trades about -0.03 of its potential returns per unit of risk. Impax Asset Management is currently generating about -0.04 per unit of risk. If you would invest 10,250 in Catalyst Media Group on August 29, 2024 and sell it today you would lose (1,250) from holding Catalyst Media Group or give up 12.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Impax Asset Management
Performance |
| Timeline |
| Catalyst Media Group |
| Impax Asset Management |
Catalyst Media and Impax Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Impax Asset
The main advantage of trading using opposite Catalyst Media and Impax Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Impax Asset 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 Impax Asset will offset losses from the drop in Impax Asset's long position.| Catalyst Media vs. Universal Music Group | Catalyst Media vs. Ecclesiastical Insurance Office | Catalyst Media vs. X FAB Silicon Foundries | Catalyst Media vs. Polar Capital Technology |
| Impax Asset vs. Catalyst Media Group | Impax Asset vs. Oncimmune Holdings plc | Impax Asset vs. Invesco Health Care | Impax Asset 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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