Correlation Between Catalyst Intelligent and Catalyst Insider

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

Diversification Opportunities for Catalyst Intelligent and Catalyst Insider

0.74

Correlation Coefficient

Catalyst Intelligent  Catalyst Insider

Poor diversification

The 3 months correlation between Catalyst and CATALYST is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Intelligent Alternati and Catalyst Insider Buying in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Insider Buying 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 Insider. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Insider Buying has no effect on the direction of Catalyst Intelligent i.e., Catalyst Intelligent and Catalyst Insider go up and down completely randomly.

Pair Corralation between Catalyst Intelligent and Catalyst Insider

Assuming the 90 days horizon Catalyst Intelligent Alternative is expected to under-perform the Catalyst Insider. But the mutual fund apears to be less risky and, when comparing its historical volatility, Catalyst Intelligent Alternative is 1.51 times less risky than Catalyst Insider. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Catalyst Insider Buying is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,146  in Catalyst Insider Buying on December 30, 2024 and sell it today you would lose (56.00) from holding Catalyst Insider Buying or give up 2.61% of portfolio value over 90 days.

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

Catalyst Intelligent Alternati  vs.  Catalyst Insider Buying

Catalyst Intelligent

Risk-Adjusted Performance

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 latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Catalyst Insider Buying

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catalyst Insider Buying has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Catalyst Insider 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 Catalyst Insider

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

The idea behind Catalyst Intelligent Alternative and Catalyst Insider Buying 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.