Correlation Between Catalystsmh High and Catalyst/map Global
Can any of the company-specific risk be diversified away by investing in both Catalystsmh High and Catalyst/map Global 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 Catalystsmh High and Catalyst/map Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystsmh High Income and Catalystmap Global Equity, you can compare the effects of market volatilities on Catalystsmh High and Catalyst/map Global 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 Catalystsmh High with a short position of Catalyst/map Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystsmh High and Catalyst/map Global.
Diversification Opportunities for Catalystsmh High and Catalyst/map Global
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Catalystsmh and Catalyst/map is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Catalystmap Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmap Global Equity and Catalystsmh 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 Catalystsmh High Income are associated (or correlated) with Catalyst/map Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmap Global Equity has no effect on the direction of Catalystsmh High i.e., Catalystsmh High and Catalyst/map Global go up and down completely randomly.
Pair Corralation between Catalystsmh High and Catalyst/map Global
Assuming the 90 days horizon Catalystsmh High Income is expected to generate 0.62 times more return on investment than Catalyst/map Global. However, Catalystsmh High Income is 1.62 times less risky than Catalyst/map Global. It trades about 0.35 of its potential returns per unit of risk. Catalystmap Global Equity is currently generating about 0.14 per unit of risk. If you would invest 370.00 in Catalystsmh High Income on September 5, 2024 and sell it today you would earn a total of 8.00 from holding Catalystsmh High Income or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystsmh High Income vs. Catalystmap Global Equity
Performance |
| Timeline |
| Catalystsmh High Income |
| Catalystmap Global Equity |
Catalystsmh High and Catalyst/map Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalystsmh High and Catalyst/map Global
The main advantage of trading using opposite Catalystsmh High and Catalyst/map Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystsmh High position performs unexpectedly, Catalyst/map Global 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/map Global will offset losses from the drop in Catalyst/map Global's long position.The idea behind Catalystsmh High Income and Catalystmap Global Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Catalyst/map Global vs. Catalystsmh High Income | Catalyst/map Global vs. Catalystsmh High Income | Catalyst/map Global vs. Catalystsmh High Income | Catalyst/map Global vs. Catalyst Mlp Infrastructure |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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