Correlation Between Catalyst Media and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC, you can compare the effects of market volatilities on Catalyst Media and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and XLMedia PLC.
Diversification Opportunities for Catalyst Media and XLMedia PLC
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst and XLMedia is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Catalyst Media i.e., Catalyst Media and XLMedia PLC go up and down completely randomly.
Pair Corralation between Catalyst Media and XLMedia PLC
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the XLMedia PLC. In addition to that, Catalyst Media is 1.48 times more volatile than XLMedia PLC. It trades about -0.41 of its total potential returns per unit of risk. XLMedia PLC is currently generating about 0.08 per unit of volatility. If you would invest 1,225 in XLMedia PLC on September 13, 2024 and sell it today you would earn a total of 25.00 from holding XLMedia PLC or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Media Group vs. XLMedia PLC
Performance |
| Timeline |
| Catalyst Media Group |
| XLMedia PLC |
Catalyst Media and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Media and XLMedia PLC
The main advantage of trading using opposite Catalyst Media and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Catalyst Media vs. Zanaga Iron Ore | Catalyst Media vs. Alior Bank SA | Catalyst Media vs. Symphony Environmental Technologies | Catalyst Media vs. Ironveld Plc |
| XLMedia PLC vs. Berkshire Hathaway | XLMedia PLC vs. Hyundai Motor | XLMedia PLC vs. Samsung Electronics Co | XLMedia PLC vs. Samsung Electronics Co |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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