Correlation Between Catalyst Intelligent and Deutsche Health

Can any of the company-specific risk be diversified away by investing in both Catalyst Intelligent and Deutsche Health 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 Deutsche Health 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 Deutsche Health And, you can compare the effects of market volatilities on Catalyst Intelligent and Deutsche Health 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 Deutsche Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Intelligent and Deutsche Health.

Diversification Opportunities for Catalyst Intelligent and Deutsche Health

0.72

Correlation Coefficient

Catalyst Intelligent  Deutsche Health

Poor diversification

The 3 months correlation between Catalyst and Deutsche is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Intelligent Alternati and Deutsche Health And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Health And 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 Deutsche Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Health And has no effect on the direction of Catalyst Intelligent i.e., Catalyst Intelligent and Deutsche Health go up and down completely randomly.

Pair Corralation between Catalyst Intelligent and Deutsche Health

Assuming the 90 days horizon Catalyst Intelligent Alternative is expected to generate 1.18 times more return on investment than Deutsche Health. However, Catalyst Intelligent is 1.18 times more volatile than Deutsche Health And. It trades about -0.02 of its potential returns per unit of risk. Deutsche Health And is currently generating about -0.09 per unit of risk. If you would invest  1,229  in Catalyst Intelligent Alternative on September 5, 2024 and sell it today you would lose (17.00) from holding Catalyst Intelligent Alternative or give up 1.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Catalyst Intelligent Alternati  vs.  Deutsche Health And

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 fairly strong basic indicators, Catalyst Intelligent is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Deutsche Health And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Health And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Deutsche Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Catalyst Intelligent and Deutsche Health

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

The idea behind Catalyst Intelligent Alternative and Deutsche Health And 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.