Correlation Between Wasatch Small and Catalystsmh High
Can any of the company-specific risk be diversified away by investing in both Wasatch Small and Catalystsmh High 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 Wasatch Small and Catalystsmh High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wasatch Small Cap and Catalystsmh High Income, you can compare the effects of market volatilities on Wasatch Small and Catalystsmh High 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 Wasatch Small with a short position of Catalystsmh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Small and Catalystsmh High.
Diversification Opportunities for Wasatch Small and Catalystsmh High
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wasatch and Catalystsmh is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch Small Cap and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High Income and Wasatch Small 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 Wasatch Small Cap are associated (or correlated) with Catalystsmh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of Wasatch Small i.e., Wasatch Small and Catalystsmh High go up and down completely randomly.
Pair Corralation between Wasatch Small and Catalystsmh High
Assuming the 90 days horizon Wasatch Small Cap is expected to under-perform the Catalystsmh High. In addition to that, Wasatch Small is 11.5 times more volatile than Catalystsmh High Income. It trades about -0.08 of its total potential returns per unit of risk. Catalystsmh High Income is currently generating about 0.2 per unit of volatility. If you would invest 370.00 in Catalystsmh High Income on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Catalystsmh High Income or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Wasatch Small Cap vs. Catalystsmh High Income
Performance |
| Timeline |
| Wasatch Small Cap |
| Catalystsmh High Income |
Wasatch Small and Catalystsmh High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wasatch Small and Catalystsmh High
The main advantage of trading using opposite Wasatch Small and Catalystsmh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Small position performs unexpectedly, Catalystsmh High 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 Catalystsmh High will offset losses from the drop in Catalystsmh High's long position.| Wasatch Small vs. Highland Longshort Healthcare | Wasatch Small vs. The Gabelli Healthcare | Wasatch Small vs. Blackrock Health Sciences | Wasatch Small vs. Baillie Gifford Health |
| Catalystsmh High vs. Fpa Queens Road | Catalystsmh High vs. Palm Valley Capital | Catalystsmh High vs. Valic Company I | Catalystsmh High vs. Amg River Road |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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