Correlation Between Rockwood Realisation and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Rockwood Realisation 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 Rockwood Realisation and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockwood Realisation PLC and Catalyst Media Group, you can compare the effects of market volatilities on Rockwood Realisation 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 Rockwood Realisation with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockwood Realisation and Catalyst Media.
Diversification Opportunities for Rockwood Realisation and Catalyst Media
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rockwood and Catalyst is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Rockwood Realisation 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 Rockwood Realisation 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 Rockwood Realisation 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 Rockwood Realisation i.e., Rockwood Realisation and Catalyst Media go up and down completely randomly.
Pair Corralation between Rockwood Realisation and Catalyst Media
Assuming the 90 days trading horizon Rockwood Realisation PLC is expected to generate 0.57 times more return on investment than Catalyst Media. However, Rockwood Realisation PLC is 1.75 times less risky than Catalyst Media. It trades about 0.16 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.04 per unit of risk. If you would invest 17,950 in Rockwood Realisation PLC on September 14, 2024 and sell it today you would earn a total of 8,250 from holding Rockwood Realisation PLC or generate 45.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Rockwood Realisation PLC vs. Catalyst Media Group
Performance |
| Timeline |
| Rockwood Realisation PLC |
| Catalyst Media Group |
Rockwood Realisation and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockwood Realisation and Catalyst Media
The main advantage of trading using opposite Rockwood Realisation and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockwood Realisation 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.| Rockwood Realisation vs. Gaztransport et Technigaz | Rockwood Realisation vs. Kaufman Et Broad | Rockwood Realisation vs. LBG Media PLC | Rockwood Realisation vs. EVS Broadcast Equipment |
| Catalyst Media vs. Berkshire Hathaway | Catalyst Media vs. Chocoladefabriken Lindt Spruengli | Catalyst Media vs. Rockwood Realisation PLC | Catalyst Media vs. Toyota Motor Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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