Correlation Between Catcher Technology and Collins

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

By analyzing existing cross correlation between Catcher Technology Co and Collins Co, you can compare the effects of market volatilities on Catcher Technology and Collins 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 Catcher Technology with a short position of Collins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catcher Technology and Collins.

Diversification Opportunities for Catcher Technology and Collins

0.45

Correlation Coefficient

Catcher Technology  Collins

Very weak diversification

The 3 months correlation between Catcher and Collins is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Catcher Technology Co and Collins Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins and Catcher Technology 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 Catcher Technology Co are associated (or correlated) with Collins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins has no effect on the direction of Catcher Technology i.e., Catcher Technology and Collins go up and down completely randomly.

Pair Corralation between Catcher Technology and Collins

Assuming the 90 days trading horizon Catcher Technology Co is expected to under-perform the Collins. In addition to that, Catcher Technology is 2.13 times more volatile than Collins Co. It trades about -0.17 of its total potential returns per unit of risk. Collins Co is currently generating about -0.17 per unit of volatility. If you would invest  1,835  in Collins Co on October 24, 2024 and sell it today you would lose (145.00) from holding Collins Co or give up 7.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Catcher Technology Co  vs.  Collins Co

Catcher Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catcher Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Collins

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Collins Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Catcher Technology and Collins

The main advantage of trading using opposite Catcher Technology and Collins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catcher Technology position performs unexpectedly, Collins 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 Collins will offset losses from the drop in Collins' long position.

The idea behind Catcher Technology Co and Collins Co 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.