Correlation Between SPDR SP and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Materials and Catalyst Media Group, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Catalyst Media.
Diversification Opportunities for SPDR SP and Catalyst Media
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between SPDR and Catalyst is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Materials 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 SPDR SP 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 SPDR SP Materials 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 SPDR SP i.e., SPDR SP and Catalyst Media go up and down completely randomly.
Pair Corralation between SPDR SP and Catalyst Media
Assuming the 90 days trading horizon SPDR SP Materials is expected to generate 0.58 times more return on investment than Catalyst Media. However, SPDR SP Materials is 1.74 times less risky than Catalyst Media. It trades about 0.04 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 3,896 in SPDR SP Materials on August 26, 2024 and sell it today you would earn a total of 676.00 from holding SPDR SP Materials or generate 17.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Materials vs. Catalyst Media Group
Performance |
| Timeline |
| SPDR SP Materials |
| Catalyst Media Group |
SPDR SP and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Catalyst Media
The main advantage of trading using opposite SPDR SP and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. iShares Treasury Bond | SPDR SP vs. iShares Treasury Bond | SPDR SP vs. Amundi Treasury Bond | SPDR SP vs. SPDR Barclays 10 |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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