Correlation Between Catalyst/smh High and Catalyst Hedged
Can any of the company-specific risk be diversified away by investing in both Catalyst/smh High and Catalyst Hedged 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/smh High and Catalyst Hedged 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 Catalyst Hedged Modity, you can compare the effects of market volatilities on Catalyst/smh High and Catalyst Hedged 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/smh High with a short position of Catalyst Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/smh High and Catalyst Hedged.
Diversification Opportunities for Catalyst/smh High and Catalyst Hedged
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst/smh and Catalyst is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Catalyst Hedged Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Hedged Modity and Catalyst/smh 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 Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Hedged Modity has no effect on the direction of Catalyst/smh High i.e., Catalyst/smh High and Catalyst Hedged go up and down completely randomly.
Pair Corralation between Catalyst/smh High and Catalyst Hedged
Assuming the 90 days horizon Catalystsmh High Income is expected to generate 0.36 times more return on investment than Catalyst Hedged. However, Catalystsmh High Income is 2.81 times less risky than Catalyst Hedged. It trades about 0.35 of its potential returns per unit of risk. Catalyst Hedged Modity is currently generating about 0.09 per unit of risk. If you would invest 369.00 in Catalystsmh High Income on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Catalystsmh High Income or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystsmh High Income vs. Catalyst Hedged Modity
Performance |
| Timeline |
| Catalystsmh High Income |
| Catalyst Hedged Modity |
Catalyst/smh High and Catalyst Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/smh High and Catalyst Hedged
The main advantage of trading using opposite Catalyst/smh High and Catalyst Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/smh High position performs unexpectedly, Catalyst Hedged 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 Hedged will offset losses from the drop in Catalyst Hedged's long position.| Catalyst/smh High vs. High Yield Bond | Catalyst/smh High vs. Artisan High Income | Catalyst/smh High vs. Pacific Funds High | Catalyst/smh High vs. Victory High Yield |
| Catalyst Hedged vs. Aqr Diversified Arbitrage | Catalyst Hedged vs. Jhancock Diversified Macro | Catalyst Hedged vs. Tax Managed Mid Small | Catalyst Hedged vs. Delaware Limited Term Diversified |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |