Correlation Between Catalyst Intelligent and Catalyst/map Global

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

By analyzing existing cross correlation between Catalyst Intelligent Alternative and Catalystmap Global Equity, you can compare the effects of market volatilities on Catalyst Intelligent and Catalyst/map Global 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 Catalyst Intelligent with a short position of Catalyst/map Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Intelligent and Catalyst/map Global.

Diversification Opportunities for Catalyst Intelligent and Catalyst/map Global

0.85

Correlation Coefficient

Catalyst Intelligent  Catalyst/map Global

Very poor diversification

The 3 months correlation between Catalyst and Catalyst/map is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Intelligent Alternati and Catalystmap Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmap Global Equity and Catalyst Intelligent 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 Catalyst Intelligent Alternative are associated (or correlated) with Catalyst/map Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmap Global Equity has no effect on the direction of Catalyst Intelligent i.e., Catalyst Intelligent and Catalyst/map Global go up and down completely randomly.

Pair Corralation between Catalyst Intelligent and Catalyst/map Global

Assuming the 90 days horizon Catalyst Intelligent Alternative is expected to under-perform the Catalyst/map Global. In addition to that, Catalyst Intelligent is 2.4 times more volatile than Catalystmap Global Equity. It trades about -0.29 of its total potential returns per unit of risk. Catalystmap Global Equity is currently generating about -0.28 per unit of volatility. If you would invest  1,780  in Catalystmap Global Equity on October 16, 2024 and sell it today you would lose (88.00) from holding Catalystmap Global Equity or give up 4.94% of portfolio value over 90 days.

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

Catalyst Intelligent Alternati  vs.  Catalystmap Global Equity

Catalyst Intelligent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalyst Intelligent Alternative has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Catalystmap Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalystmap Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Catalyst Intelligent and Catalyst/map Global

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

The idea behind Catalyst Intelligent Alternative and Catalystmap Global Equity 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.