Correlation Between Catalyst Insider and Catalyst Enhanced
Can any of the company-specific risk be diversified away by investing in both Catalyst Insider and Catalyst Enhanced 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 Insider and Catalyst Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Insider Income and Catalyst Enhanced Income, you can compare the effects of market volatilities on Catalyst Insider and Catalyst Enhanced 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 Insider with a short position of Catalyst Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Insider and Catalyst Enhanced.
Diversification Opportunities for Catalyst Insider and Catalyst Enhanced
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catalyst and Catalyst is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Insider Income and Catalyst Enhanced Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Enhanced Income and Catalyst Insider 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 Catalyst Insider Income are associated (or correlated) with Catalyst Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Enhanced Income has no effect on the direction of Catalyst Insider i.e., Catalyst Insider and Catalyst Enhanced go up and down completely randomly.
Pair Corralation between Catalyst Insider and Catalyst Enhanced
Assuming the 90 days horizon Catalyst Insider Income is expected to generate 0.52 times more return on investment than Catalyst Enhanced. However, Catalyst Insider Income is 1.93 times less risky than Catalyst Enhanced. It trades about 0.37 of its potential returns per unit of risk. Catalyst Enhanced Income is currently generating about -0.02 per unit of risk. If you would invest 911.00 in Catalyst Insider Income on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Catalyst Insider Income or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Insider Income vs. Catalyst Enhanced Income
Performance |
| Timeline |
| Catalyst Insider Income |
| Catalyst Enhanced Income |
Catalyst Insider and Catalyst Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Insider and Catalyst Enhanced
The main advantage of trading using opposite Catalyst Insider and Catalyst Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Insider position performs unexpectedly, Catalyst Enhanced 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 Enhanced will offset losses from the drop in Catalyst Enhanced's long position.| Catalyst Insider vs. Locorr Dynamic Equity | Catalyst Insider vs. Ultra Short Term Fixed | Catalyst Insider vs. Gmo Global Equity | Catalyst Insider vs. The Hartford Equity |
| Catalyst Enhanced vs. Catalystsmh High Income | Catalyst Enhanced vs. Catalystsmh High Income | Catalyst Enhanced vs. Catalystsmh High Income | Catalyst Enhanced 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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