Correlation Between Catalyst Insider and Growth Opportunities
Can any of the company-specific risk be diversified away by investing in both Catalyst Insider and Growth Opportunities 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 Growth Opportunities 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 Growth Opportunities Fund, you can compare the effects of market volatilities on Catalyst Insider and Growth Opportunities 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 Growth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Insider and Growth Opportunities.
Diversification Opportunities for Catalyst Insider and Growth Opportunities
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Catalyst and GROWTH is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Insider Buying and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities 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 Growth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Catalyst Insider i.e., Catalyst Insider and Growth Opportunities go up and down completely randomly.
Pair Corralation between Catalyst Insider and Growth Opportunities
Assuming the 90 days horizon Catalyst Insider is expected to generate 1.21 times less return on investment than Growth Opportunities. In addition to that, Catalyst Insider is 1.36 times more volatile than Growth Opportunities Fund. It trades about 0.2 of its total potential returns per unit of risk. Growth Opportunities Fund is currently generating about 0.34 per unit of volatility. If you would invest 5,471 in Growth Opportunities Fund on September 1, 2024 and sell it today you would earn a total of 385.00 from holding Growth Opportunities Fund or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Catalyst Insider Buying vs. Growth Opportunities Fund
Performance |
| Timeline |
| Catalyst Insider Buying |
| Growth Opportunities |
Catalyst Insider and Growth Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Insider and Growth Opportunities
The main advantage of trading using opposite Catalyst Insider and Growth Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Insider position performs unexpectedly, Growth Opportunities 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 Growth Opportunities will offset losses from the drop in Growth Opportunities' long position.| Catalyst Insider vs. Growth Opportunities Fund | Catalyst Insider vs. T Rowe Price | Catalyst Insider vs. Small Cap Stock | Catalyst Insider vs. Artisan Thematic Fund |
| Growth Opportunities vs. Virtus Real Estate | Growth Opportunities vs. Prudential Real Estate | Growth Opportunities vs. Deutsche Real Estate | Growth Opportunities vs. Goldman Sachs Real |
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 Stocks Directory module to find actively traded stocks across global markets.
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