Correlation Between Henderson High and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Henderson High 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 Henderson High and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson High Income and Catalyst Media Group, you can compare the effects of market volatilities on Henderson High 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 Henderson High with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson High and Catalyst Media.
Diversification Opportunities for Henderson High and Catalyst Media
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Henderson and Catalyst is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Henderson High Income 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 Henderson High 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 Henderson High Income 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 Henderson High i.e., Henderson High and Catalyst Media go up and down completely randomly.
Pair Corralation between Henderson High and Catalyst Media
Assuming the 90 days trading horizon Henderson High Income is expected to generate 0.37 times more return on investment than Catalyst Media. However, Henderson High Income is 2.72 times less risky than Catalyst Media. It trades about -0.01 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.03 per unit of risk. If you would invest 16,285 in Henderson High Income on October 24, 2024 and sell it today you would lose (135.00) from holding Henderson High Income or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henderson High Income vs. Catalyst Media Group
Performance |
| Timeline |
| Henderson High Income |
| Catalyst Media Group |
Henderson High and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson High and Catalyst Media
The main advantage of trading using opposite Henderson High and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson High 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.| Henderson High vs. Catalyst Media Group | Henderson High vs. CATLIN GROUP | Henderson High vs. Tamburi Investment Partners | Henderson High vs. Magnora ASA |
| Catalyst Media vs. Qurate Retail Series | Catalyst Media vs. Spirent Communications plc | Catalyst Media vs. Charter Communications Cl | Catalyst Media vs. Bloomsbury Publishing Plc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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