Correlation Between Catalyst Media and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Liontrust 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 Liontrust 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 Liontrust Asset Management, you can compare the effects of market volatilities on Catalyst Media and Liontrust 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 Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Liontrust Asset.
Diversification Opportunities for Catalyst Media and Liontrust Asset
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catalyst and Liontrust is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana 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 Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of Catalyst Media i.e., Catalyst Media and Liontrust Asset go up and down completely randomly.
Pair Corralation between Catalyst Media and Liontrust Asset
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.88 times more return on investment than Liontrust Asset. However, Catalyst Media Group is 1.14 times less risky than Liontrust Asset. It trades about 0.11 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about -0.07 per unit of risk. If you would invest 7,125 in Catalyst Media Group on November 7, 2024 and sell it today you would earn a total of 375.00 from holding Catalyst Media Group or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Liontrust Asset Management
Performance |
| Timeline |
| Catalyst Media Group |
| Liontrust Asset Mana |
Catalyst Media and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Liontrust Asset
The main advantage of trading using opposite Catalyst Media and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Liontrust 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 Liontrust Asset will offset losses from the drop in Liontrust Asset's long position.| Catalyst Media vs. First Class Metals | Catalyst Media vs. Alien Metals | Catalyst Media vs. URU Metals | Catalyst Media vs. Zoom Video Communications |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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