Correlation Between DCC Plc and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both DCC Plc 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 DCC Plc and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DCC plc and Catalyst Media Group, you can compare the effects of market volatilities on DCC Plc 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 DCC Plc with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of DCC Plc and Catalyst Media.
Diversification Opportunities for DCC Plc and Catalyst Media
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between DCC and Catalyst is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding DCC plc 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 DCC Plc 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 DCC plc 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 DCC Plc i.e., DCC Plc and Catalyst Media go up and down completely randomly.
Pair Corralation between DCC Plc and Catalyst Media
Assuming the 90 days trading horizon DCC plc is expected to generate 0.85 times more return on investment than Catalyst Media. However, DCC plc is 1.18 times less risky than Catalyst Media. It trades about 0.06 of its potential returns per unit of risk. Catalyst Media Group is currently generating about 0.0 per unit of risk. If you would invest 379,364 in DCC plc on September 12, 2024 and sell it today you would earn a total of 175,636 from holding DCC plc or generate 46.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
DCC plc vs. Catalyst Media Group
Performance |
| Timeline |
| DCC plc |
| Catalyst Media Group |
DCC Plc and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DCC Plc and Catalyst Media
The main advantage of trading using opposite DCC Plc and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DCC Plc 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.| DCC Plc vs. MediaZest plc | DCC Plc vs. Neometals | DCC Plc vs. Flutter Entertainment PLC | DCC Plc vs. Flow Traders NV |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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