Correlation Between G5 Entertainment and Catalyst Media

Can any of the company-specific risk be diversified away by investing in both G5 Entertainment 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 G5 Entertainment and Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G5 Entertainment AB and Catalyst Media Group, you can compare the effects of market volatilities on G5 Entertainment 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 G5 Entertainment with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Catalyst Media.

Diversification Opportunities for G5 Entertainment and Catalyst Media

-0.4

Correlation Coefficient

G5 Entertainment  Catalyst Media

Very good diversification

The 3 months correlation between 0QUS and Catalyst is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB 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 G5 Entertainment 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 G5 Entertainment AB 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 G5 Entertainment i.e., G5 Entertainment and Catalyst Media go up and down completely randomly.

Pair Corralation between G5 Entertainment and Catalyst Media

Assuming the 90 days trading horizon G5 Entertainment AB is expected to under-perform the Catalyst Media. In addition to that, G5 Entertainment is 1.46 times more volatile than Catalyst Media Group. It trades about -0.04 of its total potential returns per unit of risk. Catalyst Media Group is currently generating about -0.05 per unit of volatility. If you would invest  10,250  in Catalyst Media Group on October 5, 2024 and sell it today you would lose (2,250) from holding Catalyst Media Group or give up 21.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.88%
Values	Daily Returns

G5 Entertainment AB  vs.  Catalyst Media Group

G5 Entertainment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in G5 Entertainment AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, G5 Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Catalyst Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalyst Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with G5 Entertainment and Catalyst Media

The main advantage of trading using opposite G5 Entertainment and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment 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.

The idea behind G5 Entertainment AB and Catalyst Media Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.