Correlation Between Catalyst/smh High and Catalyst Insider
Can any of the company-specific risk be diversified away by investing in both Catalyst/smh High and Catalyst Insider 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 Insider 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 Insider Buying, you can compare the effects of market volatilities on Catalyst/smh High and Catalyst Insider 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 Insider. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/smh High and Catalyst Insider.
Diversification Opportunities for Catalyst/smh High and Catalyst Insider
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalyst/smh and Catalyst is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Catalyst Insider Buying in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Insider Buying 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 Insider. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Insider Buying has no effect on the direction of Catalyst/smh High i.e., Catalyst/smh High and Catalyst Insider go up and down completely randomly.
Pair Corralation between Catalyst/smh High and Catalyst Insider
Assuming the 90 days horizon Catalyst/smh High is expected to generate 2.92 times less return on investment than Catalyst Insider. But when comparing it to its historical volatility, Catalystsmh High Income is 4.86 times less risky than Catalyst Insider. It trades about 0.35 of its potential returns per unit of risk. Catalyst Insider Buying is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,143 in Catalyst Insider Buying on September 1, 2024 and sell it today you would earn a total of 128.00 from holding Catalyst Insider Buying or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Catalystsmh High Income vs. Catalyst Insider Buying
Performance |
| Timeline |
| Catalystsmh High Income |
| Catalyst Insider Buying |
Catalyst/smh High and Catalyst Insider Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/smh High and Catalyst Insider
The main advantage of trading using opposite Catalyst/smh High and Catalyst Insider positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/smh High position performs unexpectedly, Catalyst Insider 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 Insider will offset losses from the drop in Catalyst Insider'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 Insider vs. Growth Opportunities Fund | Catalyst Insider vs. T Rowe Price | Catalyst Insider vs. Small Cap Stock | Catalyst Insider vs. Artisan Thematic Fund |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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