Correlation Between Ceres Power and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Ceres Power and Catalyst Media 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 Ceres Power and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceres Power Holdings and Catalyst Media Group, you can compare the effects of market volatilities on Ceres Power and Catalyst Media 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 Ceres Power with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceres Power and Catalyst Media.
Diversification Opportunities for Ceres Power and Catalyst Media
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ceres and Catalyst is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ceres Power Holdings and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group and Ceres Power 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 Ceres Power Holdings are associated (or correlated) with Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Ceres Power i.e., Ceres Power and Catalyst Media go up and down completely randomly.
Pair Corralation between Ceres Power and Catalyst Media
Assuming the 90 days trading horizon Ceres Power Holdings is expected to under-perform the Catalyst Media. In addition to that, Ceres Power is 2.65 times more volatile than Catalyst Media Group. It trades about -0.01 of its total potential returns per unit of risk. Catalyst Media Group is currently generating about 0.03 per unit of volatility. If you would invest 8,500 in Catalyst Media Group on September 12, 2024 and sell it today you would earn a total of 250.00 from holding Catalyst Media Group or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Ceres Power Holdings vs. Catalyst Media Group
Performance |
| Timeline |
| Ceres Power Holdings |
| Catalyst Media Group |
Ceres Power and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceres Power and Catalyst Media
The main advantage of trading using opposite Ceres Power and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceres Power position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| Ceres Power vs. Anglesey Mining | Ceres Power vs. Sabre Insurance Group | Ceres Power vs. Endeavour Mining Corp | Ceres Power vs. United Utilities Group |
| Catalyst Media vs. Charter Communications Cl | Catalyst Media vs. Cairo Communication SpA | Catalyst Media vs. Gamma Communications PLC | Catalyst Media vs. Lowland Investment 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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