Correlation Between Catalyst Media and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Supermarket Income 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 Supermarket Income 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 Supermarket Income REIT, you can compare the effects of market volatilities on Catalyst Media and Supermarket Income 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 Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Supermarket Income.
Diversification Opportunities for Catalyst Media and Supermarket Income
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catalyst and Supermarket is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT 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 Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Catalyst Media i.e., Catalyst Media and Supermarket Income go up and down completely randomly.
Pair Corralation between Catalyst Media and Supermarket Income
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 1.26 times more return on investment than Supermarket Income. However, Catalyst Media is 1.26 times more volatile than Supermarket Income REIT. It trades about 0.13 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about -0.01 per unit of risk. If you would invest 7,150 in Catalyst Media Group on September 1, 2024 and sell it today you would earn a total of 1,850 from holding Catalyst Media Group or generate 25.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Supermarket Income REIT
Performance |
| Timeline |
| Catalyst Media Group |
| Supermarket Income REIT |
Catalyst Media and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Supermarket Income
The main advantage of trading using opposite Catalyst Media and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income'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 |
| Supermarket Income vs. Infrastrutture Wireless Italiane | Supermarket Income vs. Southwest Airlines Co | Supermarket Income vs. Indutrade AB | Supermarket Income vs. Greenroc Mining PLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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