Correlation Between Pinnacle Investment and Catalyst Metals
Can any of the company-specific risk be diversified away by investing in both Pinnacle Investment and Catalyst Metals 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 Pinnacle Investment and Catalyst Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Investment Management and Catalyst Metals, you can compare the effects of market volatilities on Pinnacle Investment and Catalyst Metals 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 Pinnacle Investment with a short position of Catalyst Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Investment and Catalyst Metals.
Diversification Opportunities for Pinnacle Investment and Catalyst Metals
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pinnacle and Catalyst is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Investment Management and Catalyst Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Metals and Pinnacle Investment 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 Pinnacle Investment Management are associated (or correlated) with Catalyst Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Metals has no effect on the direction of Pinnacle Investment i.e., Pinnacle Investment and Catalyst Metals go up and down completely randomly.
Pair Corralation between Pinnacle Investment and Catalyst Metals
Assuming the 90 days trading horizon Pinnacle Investment Management is expected to generate 0.22 times more return on investment than Catalyst Metals. However, Pinnacle Investment Management is 4.58 times less risky than Catalyst Metals. It trades about 0.64 of its potential returns per unit of risk. Catalyst Metals is currently generating about -0.09 per unit of risk. If you would invest 1,948 in Pinnacle Investment Management on August 29, 2024 and sell it today you would earn a total of 492.00 from holding Pinnacle Investment Management or generate 25.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinnacle Investment Management vs. Catalyst Metals
Performance |
| Timeline |
| Pinnacle Investment |
| Catalyst Metals |
Pinnacle Investment and Catalyst Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Investment and Catalyst Metals
The main advantage of trading using opposite Pinnacle Investment and Catalyst Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Investment position performs unexpectedly, Catalyst Metals 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 Metals will offset losses from the drop in Catalyst Metals' long position.| Pinnacle Investment vs. Champion Iron | Pinnacle Investment vs. Ridley | Pinnacle Investment vs. Peel Mining | Pinnacle Investment vs. Australian Dairy Farms |
| Catalyst Metals vs. Northern Star Resources | Catalyst Metals vs. Evolution Mining | Catalyst Metals vs. Bluescope Steel | Catalyst Metals vs. Sandfire Resources NL |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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