Correlation Between Catalyst Insider and Catalyst/smh High
Can any of the company-specific risk be diversified away by investing in both Catalyst Insider and Catalyst/smh High 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/smh High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Insider Buying and Catalystsmh High Income, you can compare the effects of market volatilities on Catalyst Insider and Catalyst/smh High 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/smh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Insider and Catalyst/smh High.
Diversification Opportunities for Catalyst Insider and Catalyst/smh High
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst and Catalyst/smh is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Insider Buying and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High 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 Buying are associated (or correlated) with Catalyst/smh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of Catalyst Insider i.e., Catalyst Insider and Catalyst/smh High go up and down completely randomly.
Pair Corralation between Catalyst Insider and Catalyst/smh High
Assuming the 90 days horizon Catalyst Insider Buying is expected to generate 3.85 times more return on investment than Catalyst/smh High. However, Catalyst Insider is 3.85 times more volatile than Catalystsmh High Income. It trades about 0.1 of its potential returns per unit of risk. Catalystsmh High Income is currently generating about 0.17 per unit of risk. If you would invest 1,427 in Catalyst Insider Buying on September 1, 2024 and sell it today you would earn a total of 786.00 from holding Catalyst Insider Buying or generate 55.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Catalyst Insider Buying vs. Catalystsmh High Income
Performance |
| Timeline |
| Catalyst Insider Buying |
| Catalystsmh High Income |
Catalyst Insider and Catalyst/smh High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Insider and Catalyst/smh High
The main advantage of trading using opposite Catalyst Insider and Catalyst/smh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Insider position performs unexpectedly, Catalyst/smh High 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/smh High will offset losses from the drop in Catalyst/smh High's long position.| Catalyst Insider vs. American Century High | Catalyst Insider vs. Artisan High Income | Catalyst Insider vs. Multi Manager High Yield | Catalyst Insider vs. Blackrock High Yield |
| 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 |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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