Correlation Between Catalyst Media and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and SPDR SP 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 SPDR SP 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 SPDR SP Materials, you can compare the effects of market volatilities on Catalyst Media and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and SPDR SP.
Diversification Opportunities for Catalyst Media and SPDR SP
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Catalyst and SPDR is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and SPDR SP Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Materials 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Materials has no effect on the direction of Catalyst Media i.e., Catalyst Media and SPDR SP go up and down completely randomly.
Pair Corralation between Catalyst Media and SPDR SP
Assuming the 90 days trading horizon Catalyst Media is expected to generate 2.59 times less return on investment than SPDR SP. In addition to that, Catalyst Media is 1.74 times more volatile than SPDR SP Materials. It trades about 0.01 of its total potential returns per unit of risk. SPDR SP Materials is currently generating about 0.04 per unit of volatility. If you would invest 3,896 in SPDR SP Materials on August 26, 2024 and sell it today you would earn a total of 676.00 from holding SPDR SP Materials or generate 17.35% 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. SPDR SP Materials
Performance |
| Timeline |
| Catalyst Media Group |
| SPDR SP Materials |
Catalyst Media and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and SPDR SP
The main advantage of trading using opposite Catalyst Media and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Catalyst Media vs. Toyota Motor Corp | Catalyst Media vs. SoftBank Group Corp | Catalyst Media vs. Fannie Mae | Catalyst Media vs. Panasonic Corp |
| SPDR SP vs. iShares Treasury Bond | SPDR SP vs. iShares Treasury Bond | SPDR SP vs. Amundi Treasury Bond | SPDR SP vs. SPDR Barclays 10 |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |