Correlation Between Hood River and Catalyst/map Global
Can any of the company-specific risk be diversified away by investing in both Hood River 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 Hood River 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 Hood River New and Catalystmap Global Balanced, you can compare the effects of market volatilities on Hood River 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 Hood River with a short position of Catalyst/map Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hood River and Catalyst/map Global.
Diversification Opportunities for Hood River and Catalyst/map Global
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hood and Catalyst/map is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hood River New and Catalystmap Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst/map Global and Hood River 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 Hood River New 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 Catalyst/map Global has no effect on the direction of Hood River i.e., Hood River and Catalyst/map Global go up and down completely randomly.
Pair Corralation between Hood River and Catalyst/map Global
Assuming the 90 days horizon Hood River New is expected to generate 3.7 times more return on investment than Catalyst/map Global. However, Hood River is 3.7 times more volatile than Catalystmap Global Balanced. It trades about 0.33 of its potential returns per unit of risk. Catalystmap Global Balanced is currently generating about 0.07 per unit of risk. If you would invest 1,000.00 in Hood River New on September 4, 2024 and sell it today you would earn a total of 420.00 from holding Hood River New or generate 42.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 34.01% |
| Values | Daily Returns |
Hood River New vs. Catalystmap Global Balanced
Performance |
| Timeline |
| Hood River New |
| Catalyst/map Global |
Hood River and Catalyst/map Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hood River and Catalyst/map Global
The main advantage of trading using opposite Hood River and Catalyst/map Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hood River 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.| Hood River vs. Vanguard Total Stock | Hood River vs. Vanguard 500 Index | Hood River vs. Vanguard Total Stock | Hood River vs. Vanguard Total Stock |
| Catalyst/map Global vs. T Rowe Price | Catalyst/map Global vs. T Rowe Price | Catalyst/map Global vs. Hood River New | Catalyst/map Global vs. T Rowe Price |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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