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
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalyst and Litigation is 0.81. 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 Group is expected to generate 1.15 times more return on investment than Litigation Capital. However, Catalyst Media is 1.15 times more volatile than Litigation Capital Management. It trades about -0.01 of its potential returns per unit of risk. Litigation Capital Management is currently generating about -0.29 per unit of risk. If you would invest 7,600 in Catalyst Media Group on November 3, 2024 and sell it today you would lose (100.00) from holding Catalyst Media Group or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| 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. Take Two Interactive Software | Catalyst Media vs. Scandic Hotels Group | Catalyst Media vs. Allianz Technology Trust | Catalyst Media vs. Roper Technologies |
| Litigation Capital vs. Bankers Investment Trust | Litigation Capital vs. Dairy Farm International | Litigation Capital vs. Chrysalis Investments | Litigation Capital vs. Lowland Investment Co |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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