Correlation Between Trellus Health and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Trellus Health 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 Trellus Health and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trellus Health plc and Catalyst Media Group, you can compare the effects of market volatilities on Trellus Health 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 Trellus Health with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trellus Health and Catalyst Media.
Diversification Opportunities for Trellus Health and Catalyst Media
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Trellus and Catalyst is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Trellus Health 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 Trellus Health 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 Trellus Health 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 Trellus Health i.e., Trellus Health and Catalyst Media go up and down completely randomly.
Pair Corralation between Trellus Health and Catalyst Media
Assuming the 90 days trading horizon Trellus Health plc is expected to under-perform the Catalyst Media. But the stock apears to be less risky and, when comparing its historical volatility, Trellus Health plc is 1.5 times less risky than Catalyst Media. The stock trades about -0.18 of its potential returns per unit of risk. The Catalyst Media Group is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 9,750 in Catalyst Media Group on August 31, 2024 and sell it today you would lose (750.00) from holding Catalyst Media Group or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trellus Health plc vs. Catalyst Media Group
Performance |
| Timeline |
| Trellus Health plc |
| Catalyst Media Group |
Trellus Health and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trellus Health and Catalyst Media
The main advantage of trading using opposite Trellus Health and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trellus Health 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.| Trellus Health vs. Toyota Motor Corp | Trellus Health vs. SoftBank Group Corp | Trellus Health vs. State Bank of | Trellus Health vs. MOL Hungarian Oil |
| Catalyst Media vs. Aurora Investment Trust | Catalyst Media vs. Panther Metals PLC | Catalyst Media vs. Taylor Maritime Investments | Catalyst Media vs. JB Hunt Transport |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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