Correlation Between North American and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both North American 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 North American and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The North American and Catalyst Media Group, you can compare the effects of market volatilities on North American 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 North American with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Catalyst Media.
Diversification Opportunities for North American and Catalyst Media
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between North and Catalyst is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding The North American 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 North American 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 The North American 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 North American i.e., North American and Catalyst Media go up and down completely randomly.
Pair Corralation between North American and Catalyst Media
Assuming the 90 days trading horizon The North American is expected to generate 0.27 times more return on investment than Catalyst Media. However, The North American is 3.75 times less risky than Catalyst Media. It trades about 0.33 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.01 per unit of risk. If you would invest 32,697 in The North American on October 23, 2024 and sell it today you would earn a total of 1,703 from holding The North American or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The North American vs. Catalyst Media Group
Performance |
| Timeline |
| North American |
| Catalyst Media Group |
North American and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Catalyst Media
The main advantage of trading using opposite North American and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American 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.| North American vs. Catalyst Media Group | North American vs. CATLIN GROUP | North American vs. Tamburi Investment Partners | North American vs. Magnora ASA |
| Catalyst Media vs. Veolia Environnement VE | Catalyst Media vs. Schroders Investment Trusts | Catalyst Media vs. EJF Investments | Catalyst Media vs. Vietnam Enterprise Investments |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |