Correlation Between Investec Global and Catalystcifc Floating
Can any of the company-specific risk be diversified away by investing in both Investec Global and Catalystcifc Floating 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 Investec Global and Catalystcifc Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Global Franchise and Catalystcifc Floating Rate, you can compare the effects of market volatilities on Investec Global and Catalystcifc Floating 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 Investec Global with a short position of Catalystcifc Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Global and Catalystcifc Floating.
Diversification Opportunities for Investec Global and Catalystcifc Floating
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Investec and Catalystcifc is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Investec Global Franchise and Catalystcifc Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystcifc Floating and Investec Global 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 Investec Global Franchise are associated (or correlated) with Catalystcifc Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystcifc Floating has no effect on the direction of Investec Global i.e., Investec Global and Catalystcifc Floating go up and down completely randomly.
Pair Corralation between Investec Global and Catalystcifc Floating
Assuming the 90 days horizon Investec Global Franchise is expected to generate 12.39 times more return on investment than Catalystcifc Floating. However, Investec Global is 12.39 times more volatile than Catalystcifc Floating Rate. It trades about 0.21 of its potential returns per unit of risk. Catalystcifc Floating Rate is currently generating about 0.46 per unit of risk. If you would invest 1,776 in Investec Global Franchise on September 12, 2024 and sell it today you would earn a total of 43.00 from holding Investec Global Franchise or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Global Franchise vs. Catalystcifc Floating Rate
Performance |
| Timeline |
| Investec Global Franchise |
| Catalystcifc Floating |
Investec Global and Catalystcifc Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Global and Catalystcifc Floating
The main advantage of trading using opposite Investec Global and Catalystcifc Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Global position performs unexpectedly, Catalystcifc Floating 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 Catalystcifc Floating will offset losses from the drop in Catalystcifc Floating's long position.| Investec Global vs. Pace Smallmedium Value | Investec Global vs. Kinetics Small Cap | Investec Global vs. Touchstone Small Cap | Investec Global vs. Ab Small Cap |
| Catalystcifc Floating vs. Franklin Mutual Global | Catalystcifc Floating vs. Mirova Global Green | Catalystcifc Floating vs. 361 Global Longshort | Catalystcifc Floating vs. Investec Global Franchise |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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