Correlation Between Catalyst Media and North Atlantic
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and North Atlantic 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 North Atlantic 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 North Atlantic Smaller, you can compare the effects of market volatilities on Catalyst Media and North Atlantic 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 North Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and North Atlantic.
Diversification Opportunities for Catalyst Media and North Atlantic
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catalyst and North is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and North Atlantic Smaller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Atlantic Smaller 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 North Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Atlantic Smaller has no effect on the direction of Catalyst Media i.e., Catalyst Media and North Atlantic go up and down completely randomly.
Pair Corralation between Catalyst Media and North Atlantic
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the North Atlantic. In addition to that, Catalyst Media is 1.03 times more volatile than North Atlantic Smaller. It trades about -0.03 of its total potential returns per unit of risk. North Atlantic Smaller is currently generating about 0.01 per unit of volatility. If you would invest 356,916 in North Atlantic Smaller on September 21, 2024 and sell it today you would earn a total of 6,084 from holding North Atlantic Smaller or generate 1.7% 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. North Atlantic Smaller
Performance |
| Timeline |
| Catalyst Media Group |
| North Atlantic Smaller |
Catalyst Media and North Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and North Atlantic
The main advantage of trading using opposite Catalyst Media and North Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, North Atlantic 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 North Atlantic will offset losses from the drop in North Atlantic's long position.| Catalyst Media vs. Berkshire Hathaway | Catalyst Media vs. Chocoladefabriken Lindt Spruengli | Catalyst Media vs. Rockwood Realisation PLC | Catalyst Media vs. Toyota Motor Corp |
| North Atlantic vs. Take Two Interactive Software | North Atlantic vs. Catalyst Media Group | North Atlantic vs. Alfa Financial Software | North Atlantic vs. Centaur Media |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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