Correlation Between Small Company and Catalyst Hedged
Can any of the company-specific risk be diversified away by investing in both Small Company and Catalyst Hedged 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 Small Company and Catalyst Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Growth and Catalyst Hedged Modity, you can compare the effects of market volatilities on Small Company and Catalyst Hedged 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 Small Company with a short position of Catalyst Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Company and Catalyst Hedged.
Diversification Opportunities for Small Company and Catalyst Hedged
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Small and Catalyst is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth and Catalyst Hedged Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Hedged Modity and Small Company 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 Small Pany Growth are associated (or correlated) with Catalyst Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Hedged Modity has no effect on the direction of Small Company i.e., Small Company and Catalyst Hedged go up and down completely randomly.
Pair Corralation between Small Company and Catalyst Hedged
Assuming the 90 days horizon Small Pany Growth is expected to generate 2.73 times more return on investment than Catalyst Hedged. However, Small Company is 2.73 times more volatile than Catalyst Hedged Modity. It trades about 0.07 of its potential returns per unit of risk. Catalyst Hedged Modity is currently generating about -0.01 per unit of risk. If you would invest 869.00 in Small Pany Growth on September 3, 2024 and sell it today you would earn a total of 800.00 from holding Small Pany Growth or generate 92.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Pany Growth vs. Catalyst Hedged Modity
Performance |
| Timeline |
| Small Pany Growth |
| Catalyst Hedged Modity |
Small Company and Catalyst Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Company and Catalyst Hedged
The main advantage of trading using opposite Small Company and Catalyst Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Company position performs unexpectedly, Catalyst Hedged 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 Hedged will offset losses from the drop in Catalyst Hedged's long position.| Small Company vs. Mid Cap Growth | Small Company vs. Growth Portfolio Class | Small Company vs. Morgan Stanley Multi | Small Company vs. Emerging Markets Portfolio |
| Catalyst Hedged vs. Gabelli Convertible And | Catalyst Hedged vs. Lord Abbett Convertible | Catalyst Hedged vs. Virtus Convertible | Catalyst Hedged vs. Allianzgi Convertible Income |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |