Correlation Between Catalyst Media and River
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and River 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 River 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 River and Mercantile, you can compare the effects of market volatilities on Catalyst Media and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and River.
Diversification Opportunities for Catalyst Media and River
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalyst and River is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Catalyst Media i.e., Catalyst Media and River go up and down completely randomly.
Pair Corralation between Catalyst Media and River
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the River. In addition to that, Catalyst Media is 1.77 times more volatile than River and Mercantile. It trades about -0.36 of its total potential returns per unit of risk. River and Mercantile is currently generating about -0.04 per unit of volatility. If you would invest 17,950 in River and Mercantile on September 20, 2024 and sell it today you would lose (200.00) from holding River and Mercantile or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. River and Mercantile
Performance |
| Timeline |
| Catalyst Media Group |
| River and Mercantile |
Catalyst Media and River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and River
The main advantage of trading using opposite Catalyst Media and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, River 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 River will offset losses from the drop in River's long position.| Catalyst Media vs. Zoom Video Communications | Catalyst Media vs. Batm Advanced Communications | Catalyst Media vs. United Internet AG | Catalyst Media vs. mobilezone holding AG |
| River vs. Catalyst Media Group | River vs. CATLIN GROUP | River vs. Tamburi Investment Partners | River vs. Magnora ASA |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |