Correlation Between Catalyst/map Global and Catalystsmh High

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Can any of the company-specific risk be diversified away by investing in both Catalyst/map Global and Catalystsmh High 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/map Global and Catalystsmh High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystmap Global Equity and Catalystsmh High Income, you can compare the effects of market volatilities on Catalyst/map Global and Catalystsmh High 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/map Global with a short position of Catalystsmh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/map Global and Catalystsmh High.

Diversification Opportunities for Catalyst/map Global and Catalystsmh High

Catalyst/mapCatalystsmhDiversified AwayCatalyst/mapCatalystsmhDiversified Away100%
0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Catalyst/map and Catalystsmh is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmap Global Equity and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High Income and Catalyst/map Global 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 Catalystmap Global Equity are associated (or correlated) with Catalystsmh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of Catalyst/map Global i.e., Catalyst/map Global and Catalystsmh High go up and down completely randomly.

Pair Corralation between Catalyst/map Global and Catalystsmh High

Assuming the 90 days horizon Catalystmap Global Equity is expected to under-perform the Catalystsmh High. In addition to that, Catalyst/map Global is 2.92 times more volatile than Catalystsmh High Income. It trades about -0.03 of its total potential returns per unit of risk. Catalystsmh High Income is currently generating about 0.11 per unit of volatility. If you would invest  371.00  in Catalystsmh High Income on November 18, 2024 and sell it today you would earn a total of  7.00  from holding Catalystsmh High Income or generate 1.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Catalystmap Global Equity  vs.  Catalystsmh High Income

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -8-6-4-20
JavaScript chart by amCharts 3.21.15CAXIX HIICX
       Timeline  
Catalystmap Global Equity 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Catalystmap Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Catalyst/map Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1717.217.417.617.81818.218.4
Catalystsmh High Income 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Catalystsmh High Income are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Catalystsmh High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.663.683.73.723.743.763.78

Catalyst/map Global and Catalystsmh High Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.31-0.97-0.63-0.29-0.02750.180.520.861.21.54 12345
JavaScript chart by amCharts 3.21.15CAXIX HIICX
       Returns  

Pair Trading with Catalyst/map Global and Catalystsmh High

The main advantage of trading using opposite Catalyst/map Global and Catalystsmh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/map Global position performs unexpectedly, Catalystsmh High 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 Catalystsmh High will offset losses from the drop in Catalystsmh High's long position.
The idea behind Catalystmap Global Equity and Catalystsmh High Income 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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