Correlation Between Catalyst Media and MediaZest Plc
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and MediaZest Plc 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 MediaZest Plc 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 MediaZest plc, you can compare the effects of market volatilities on Catalyst Media and MediaZest Plc 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 MediaZest Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and MediaZest Plc.
Diversification Opportunities for Catalyst Media and MediaZest Plc
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Catalyst and MediaZest is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and MediaZest plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaZest plc 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 MediaZest Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaZest plc has no effect on the direction of Catalyst Media i.e., Catalyst Media and MediaZest Plc go up and down completely randomly.
Pair Corralation between Catalyst Media and MediaZest Plc
Assuming the 90 days trading horizon Catalyst Media is expected to generate 1.21 times less return on investment than MediaZest Plc. But when comparing it to its historical volatility, Catalyst Media Group is 2.82 times less risky than MediaZest Plc. It trades about 0.13 of its potential returns per unit of risk. MediaZest plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.25 in MediaZest plc on September 1, 2024 and sell it today you would earn a total of 1.25 from holding MediaZest plc or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. MediaZest plc
Performance |
| Timeline |
| Catalyst Media Group |
| MediaZest plc |
Catalyst Media and MediaZest Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and MediaZest Plc
The main advantage of trading using opposite Catalyst Media and MediaZest Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, MediaZest Plc 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 MediaZest Plc will offset losses from the drop in MediaZest Plc's long position.| Catalyst Media vs. Samsung Electronics Co | Catalyst Media vs. Samsung Electronics Co | Catalyst Media vs. Hyundai Motor | Catalyst Media vs. Toyota Motor Corp |
| MediaZest Plc vs. Cornish Metals | MediaZest Plc vs. AMG Advanced Metallurgical | MediaZest Plc vs. Seche Environnement SA | MediaZest Plc vs. Jacquet Metal Service |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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