Correlation Between Catalyst Media and Orient Telecoms
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Orient Telecoms 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 Orient Telecoms 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 Orient Telecoms, you can compare the effects of market volatilities on Catalyst Media and Orient Telecoms 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 Orient Telecoms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Orient Telecoms.
Diversification Opportunities for Catalyst Media and Orient Telecoms
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Catalyst and Orient is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Orient Telecoms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Telecoms 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 Orient Telecoms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Telecoms has no effect on the direction of Catalyst Media i.e., Catalyst Media and Orient Telecoms go up and down completely randomly.
Pair Corralation between Catalyst Media and Orient Telecoms
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.67 times more return on investment than Orient Telecoms. However, Catalyst Media Group is 1.49 times less risky than Orient Telecoms. It trades about 0.09 of its potential returns per unit of risk. Orient Telecoms is currently generating about -0.07 per unit of risk. If you would invest 7,750 in Catalyst Media Group on September 3, 2024 and sell it today you would earn a total of 1,250 from holding Catalyst Media Group or generate 16.13% 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. Orient Telecoms
Performance |
| Timeline |
| Catalyst Media Group |
| Orient Telecoms |
Catalyst Media and Orient Telecoms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Orient Telecoms
The main advantage of trading using opposite Catalyst Media and Orient Telecoms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Orient Telecoms 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 Orient Telecoms will offset losses from the drop in Orient Telecoms' 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 |
| Orient Telecoms vs. Catena Media PLC | Orient Telecoms vs. Catalyst Media Group | Orient Telecoms vs. Charter Communications Cl | Orient Telecoms vs. Cellnex Telecom SA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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