Correlation Between Catalyst Enhanced and Pro Blend
Can any of the company-specific risk be diversified away by investing in both Catalyst Enhanced and Pro Blend 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 Enhanced and Pro Blend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Enhanced Income and Pro Blend Moderate Term, you can compare the effects of market volatilities on Catalyst Enhanced and Pro Blend 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 Enhanced with a short position of Pro Blend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Enhanced and Pro Blend.
Diversification Opportunities for Catalyst Enhanced and Pro Blend
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst and Pro is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Enhanced Income and Pro Blend Moderate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Blend Moderate and Catalyst Enhanced 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 Enhanced Income are associated (or correlated) with Pro Blend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Blend Moderate has no effect on the direction of Catalyst Enhanced i.e., Catalyst Enhanced and Pro Blend go up and down completely randomly.
Pair Corralation between Catalyst Enhanced and Pro Blend
Assuming the 90 days horizon Catalyst Enhanced is expected to generate 1.48 times less return on investment than Pro Blend. But when comparing it to its historical volatility, Catalyst Enhanced Income is 1.47 times less risky than Pro Blend. It trades about 0.19 of its potential returns per unit of risk. Pro Blend Moderate Term is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,483 in Pro Blend Moderate Term on September 13, 2024 and sell it today you would earn a total of 19.00 from holding Pro Blend Moderate Term or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Enhanced Income vs. Pro Blend Moderate Term
Performance |
| Timeline |
| Catalyst Enhanced Income |
| Pro Blend Moderate |
Catalyst Enhanced and Pro Blend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Enhanced and Pro Blend
The main advantage of trading using opposite Catalyst Enhanced and Pro Blend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Enhanced position performs unexpectedly, Pro Blend 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 Pro Blend will offset losses from the drop in Pro Blend's long position.| Catalyst Enhanced vs. Pro Blend Moderate Term | Catalyst Enhanced vs. College Retirement Equities | Catalyst Enhanced vs. Columbia Moderate Growth | Catalyst Enhanced vs. Transamerica Cleartrack Retirement |
| Pro Blend vs. Pro Blend Servative Term | Pro Blend vs. Pro Blend Extended Term | Pro Blend vs. Pro Blend Maximum Term | Pro Blend vs. Greenspring Fund Retail |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |