Correlation Between Smithson Investment and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Smithson Investment 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 Smithson Investment and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smithson Investment Trust and Catalyst Media Group, you can compare the effects of market volatilities on Smithson Investment 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 Smithson Investment with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smithson Investment and Catalyst Media.
Diversification Opportunities for Smithson Investment and Catalyst Media
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Smithson and Catalyst is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Smithson Investment Trust 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 Smithson 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 Smithson Investment Trust 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 Smithson Investment i.e., Smithson Investment and Catalyst Media go up and down completely randomly.
Pair Corralation between Smithson Investment and Catalyst Media
Assuming the 90 days trading horizon Smithson Investment Trust is expected to generate 0.73 times more return on investment than Catalyst Media. However, Smithson Investment Trust is 1.36 times less risky than Catalyst Media. It trades about 0.02 of its potential returns per unit of risk. Catalyst Media Group is currently generating about 0.0 per unit of risk. If you would invest 135,500 in Smithson Investment Trust on September 3, 2024 and sell it today you would earn a total of 14,100 from holding Smithson Investment Trust or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Smithson Investment Trust vs. Catalyst Media Group
Performance |
| Timeline |
| Smithson Investment Trust |
| Catalyst Media Group |
Smithson Investment and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smithson Investment and Catalyst Media
The main advantage of trading using opposite Smithson Investment and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smithson Investment 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.| Smithson Investment vs. SupplyMe Capital PLC | Smithson Investment vs. 88 Energy | Smithson Investment vs. Vodafone Group PLC | Smithson Investment vs. Vodafone Group PLC |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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