Correlation Between Catalyst Media and Thor Mining
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Thor Mining 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 Thor Mining 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 Thor Mining PLC, you can compare the effects of market volatilities on Catalyst Media and Thor Mining 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 Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Thor Mining.
Diversification Opportunities for Catalyst Media and Thor Mining
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalyst and Thor is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC 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 Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of Catalyst Media i.e., Catalyst Media and Thor Mining go up and down completely randomly.
Pair Corralation between Catalyst Media and Thor Mining
Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.68 times more return on investment than Thor Mining. However, Catalyst Media Group is 1.47 times less risky than Thor Mining. It trades about 0.11 of its potential returns per unit of risk. Thor Mining PLC is currently generating about 0.05 per unit of risk. If you would invest 7,125 in Catalyst Media Group on November 7, 2024 and sell it today you would earn a total of 375.00 from holding Catalyst Media Group or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. Thor Mining PLC
Performance |
| Timeline |
| Catalyst Media Group |
| Thor Mining PLC |
Catalyst Media and Thor Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and Thor Mining
The main advantage of trading using opposite Catalyst Media and Thor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Thor Mining 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 Thor Mining will offset losses from the drop in Thor Mining's long position.| Catalyst Media vs. First Class Metals | Catalyst Media vs. Alien Metals | Catalyst Media vs. URU Metals | Catalyst Media vs. Zoom Video Communications |
| Thor Mining vs. Capital Metals PLC | Thor Mining vs. European Metals Holdings | Thor Mining vs. Polar Capital Technology | Thor Mining vs. Europa Metals |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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