Correlation Between Catalystsmh High and Catalystmap Global
Can any of the company-specific risk be diversified away by investing in both Catalystsmh High and Catalystmap 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 Catalystmap 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 Balanced, you can compare the effects of market volatilities on Catalystsmh High and Catalystmap 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 Catalystmap Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystsmh High and Catalystmap Global.
Diversification Opportunities for Catalystsmh High and Catalystmap Global
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catalystsmh and Catalystmap is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Catalystmap Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmap Global 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 Catalystmap 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 has no effect on the direction of Catalystsmh High i.e., Catalystsmh High and Catalystmap Global go up and down completely randomly.
Pair Corralation between Catalystsmh High and Catalystmap Global
Assuming the 90 days horizon Catalystsmh High Income is expected to generate 0.88 times more return on investment than Catalystmap Global. However, Catalystsmh High Income is 1.13 times less risky than Catalystmap Global. It trades about 0.15 of its potential returns per unit of risk. Catalystmap Global Balanced is currently generating about 0.04 per unit of risk. If you would invest 295.00 in Catalystsmh High Income on September 14, 2024 and sell it today you would earn a total of 82.00 from holding Catalystsmh High Income or generate 27.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystsmh High Income vs. Catalystmap Global Balanced
Performance |
| Timeline |
| Catalystsmh High Income |
| Catalystmap Global |
Catalystsmh High and Catalystmap Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalystsmh High and Catalystmap Global
The main advantage of trading using opposite Catalystsmh High and Catalystmap Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystsmh High position performs unexpectedly, Catalystmap 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 Catalystmap Global will offset losses from the drop in Catalystmap Global's long position.| Catalystsmh High vs. High Yield Bond | Catalystsmh High vs. Artisan High Income | Catalystsmh High vs. Pacific Funds High | Catalystsmh High vs. Victory High Yield |
| Catalystmap Global vs. Catalystsmh High Income | Catalystmap Global vs. Catalystsmh High Income | Catalystmap Global vs. Catalystsmh High Income | Catalystmap 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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