Correlation Between Catalyst Metals and Regal Investment
Can any of the company-specific risk be diversified away by investing in both Catalyst Metals and Regal Investment 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 Metals and Regal Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Metals and Regal Investment, you can compare the effects of market volatilities on Catalyst Metals and Regal Investment 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 Metals with a short position of Regal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Metals and Regal Investment.
Diversification Opportunities for Catalyst Metals and Regal Investment
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst and Regal is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Metals and Regal Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Investment and Catalyst Metals 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 Metals are associated (or correlated) with Regal Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Investment has no effect on the direction of Catalyst Metals i.e., Catalyst Metals and Regal Investment go up and down completely randomly.
Pair Corralation between Catalyst Metals and Regal Investment
Assuming the 90 days trading horizon Catalyst Metals is expected to generate 3.67 times more return on investment than Regal Investment. However, Catalyst Metals is 3.67 times more volatile than Regal Investment. It trades about 0.09 of its potential returns per unit of risk. Regal Investment is currently generating about 0.07 per unit of risk. If you would invest 81.00 in Catalyst Metals on August 31, 2024 and sell it today you would earn a total of 188.00 from holding Catalyst Metals or generate 232.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Metals vs. Regal Investment
Performance |
| Timeline |
| Catalyst Metals |
| Regal Investment |
Catalyst Metals and Regal Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Metals and Regal Investment
The main advantage of trading using opposite Catalyst Metals and Regal Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Metals position performs unexpectedly, Regal Investment 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 Regal Investment will offset losses from the drop in Regal Investment's long position.| Catalyst Metals vs. Northern Star Resources | Catalyst Metals vs. Evolution Mining | Catalyst Metals vs. Bluescope Steel | Catalyst Metals vs. De Grey Mining |
| Regal Investment vs. Westpac Banking | Regal Investment vs. Odyssey Energy | Regal Investment vs. Ecofibre | Regal Investment vs. iShares Global Healthcare |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |