Correlation Between Catalyst Media and Metals Exploration
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Metals Exploration 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 Metals Exploration 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 Metals Exploration Plc, you can compare the effects of market volatilities on Catalyst Media and Metals Exploration 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 Metals Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Metals Exploration.
Diversification Opportunities for Catalyst Media and Metals Exploration
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst and Metals is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Metals Exploration Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Exploration 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 Metals Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Exploration Plc has no effect on the direction of Catalyst Media i.e., Catalyst Media and Metals Exploration go up and down completely randomly.
Pair Corralation between Catalyst Media and Metals Exploration
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the Metals Exploration. But the stock apears to be less risky and, when comparing its historical volatility, Catalyst Media Group is 1.53 times less risky than Metals Exploration. The stock trades about -0.41 of its potential returns per unit of risk. The Metals Exploration Plc is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 608.00 in Metals Exploration Plc on September 3, 2024 and sell it today you would lose (88.00) from holding Metals Exploration Plc or give up 14.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Metals Exploration Plc
Performance |
| Timeline |
| Catalyst Media Group |
| Metals Exploration Plc |
Catalyst Media and Metals Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Metals Exploration
The main advantage of trading using opposite Catalyst Media and Metals Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Metals Exploration 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 Metals Exploration will offset losses from the drop in Metals Exploration's long position.| Catalyst Media vs. Smithson Investment Trust | Catalyst Media vs. Kinnevik Investment AB | Catalyst Media vs. New Residential Investment | Catalyst Media vs. The Mercantile Investment |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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