Correlation Between Metals Exploration and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Metals Exploration and Catalyst Media 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 Metals Exploration and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Exploration Plc and Catalyst Media Group, you can compare the effects of market volatilities on Metals Exploration and Catalyst Media 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 Metals Exploration with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Catalyst Media.
Diversification Opportunities for Metals Exploration and Catalyst Media
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metals and Catalyst is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group and Metals Exploration 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 Metals Exploration Plc are associated (or correlated) with Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Metals Exploration i.e., Metals Exploration and Catalyst Media go up and down completely randomly.
Pair Corralation between Metals Exploration and Catalyst Media
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 1.53 times more return on investment than Catalyst Media. However, Metals Exploration is 1.53 times more volatile than Catalyst Media Group. It trades about -0.23 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.41 per unit of risk. If you would invest 608.00 in Metals Exploration Plc on September 3, 2024 and sell it today you would lose (88.00) from holding Metals Exploration Plc or give up 14.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals Exploration Plc vs. Catalyst Media Group
Performance |
| Timeline |
| Metals Exploration Plc |
| Catalyst Media Group |
Metals Exploration and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and Catalyst Media
The main advantage of trading using opposite Metals Exploration and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration position performs unexpectedly, Catalyst Media 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 Media will offset losses from the drop in Catalyst Media's long position.The idea behind Metals Exploration Plc and Catalyst Media Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Catalyst Media vs. Smithson Investment Trust | Catalyst Media vs. Kinnevik Investment AB | Catalyst Media vs. New Residential Investment | Catalyst Media vs. The Mercantile Investment |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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