Correlation Between Catalyst Media and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Litigation Capital 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 Litigation Capital 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 Litigation Capital Management, you can compare the effects of market volatilities on Catalyst Media and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Litigation Capital.
Diversification Opportunities for Catalyst Media and Litigation Capital
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalyst and Litigation is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Catalyst Media i.e., Catalyst Media and Litigation Capital go up and down completely randomly.
Pair Corralation between Catalyst Media and Litigation Capital
Assuming the 90 days trading horizon Catalyst Media is expected to generate 2.1 times less return on investment than Litigation Capital. In addition to that, Catalyst Media is 2.71 times more volatile than Litigation Capital Management. It trades about 0.04 of its total potential returns per unit of risk. Litigation Capital Management is currently generating about 0.23 per unit of volatility. If you would invest 11,075 in Litigation Capital Management on August 25, 2024 and sell it today you would earn a total of 500.00 from holding Litigation Capital Management or generate 4.51% 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. Litigation Capital Management
Performance |
| Timeline |
| Catalyst Media Group |
| Litigation Capital |
Catalyst Media and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Litigation Capital
The main advantage of trading using opposite Catalyst Media and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Catalyst Media vs. Toyota Motor Corp | Catalyst Media vs. SoftBank Group Corp | Catalyst Media vs. Fannie Mae | Catalyst Media vs. Panasonic Corp |
| Litigation Capital vs. Catalyst Media Group | Litigation Capital vs. Oncimmune Holdings plc | Litigation Capital vs. Invesco Health Care | Litigation Capital 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Transaction History View history of all your transactions and understand their impact on performance |