Correlation Between Polar Capital and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Polar Capital 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 Polar Capital and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Capital Technology and Catalyst Media Group, you can compare the effects of market volatilities on Polar Capital 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 Polar Capital with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Catalyst Media.
Diversification Opportunities for Polar Capital and Catalyst Media
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polar and Catalyst is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology 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 Polar Capital 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 Polar Capital Technology 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 Polar Capital i.e., Polar Capital and Catalyst Media go up and down completely randomly.
Pair Corralation between Polar Capital and Catalyst Media
Assuming the 90 days trading horizon Polar Capital is expected to generate 2.04 times less return on investment than Catalyst Media. In addition to that, Polar Capital is 1.03 times more volatile than Catalyst Media Group. It trades about 0.06 of its total potential returns per unit of risk. Catalyst Media Group is currently generating about 0.13 per unit of volatility. If you would invest 7,150 in Catalyst Media Group on August 29, 2024 and sell it today you would earn a total of 1,850 from holding Catalyst Media Group or generate 25.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Capital Technology vs. Catalyst Media Group
Performance |
| Timeline |
| Polar Capital Technology |
| Catalyst Media Group |
Polar Capital and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Catalyst Media
The main advantage of trading using opposite Polar Capital and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital 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.| Polar Capital vs. Toyota Motor Corp | Polar Capital vs. Lendinvest PLC | Polar Capital vs. Neometals | Polar Capital vs. Coor Service Management |
| Catalyst Media vs. Walmart | Catalyst Media vs. BYD Co | Catalyst Media vs. Volkswagen AG | Catalyst Media vs. Volkswagen AG Non Vtg |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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