Correlation Between Catalyst Media and G5 Entertainment

Can any of the company-specific risk be diversified away by investing in both Catalyst Media and G5 Entertainment 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 Media and G5 Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalyst Media Group and G5 Entertainment AB, you can compare the effects of market volatilities on Catalyst Media and G5 Entertainment 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 Media with a short position of G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and G5 Entertainment.

Diversification Opportunities for Catalyst Media and G5 Entertainment

-0.4

Correlation Coefficient

Catalyst Media  G5 Entertainment

Very good diversification

The 3 months correlation between Catalyst and 0QUS is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and G5 Entertainment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment and Catalyst Media 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 Media Group are associated (or correlated) with G5 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G5 Entertainment has no effect on the direction of Catalyst Media i.e., Catalyst Media and G5 Entertainment go up and down completely randomly.

Pair Corralation between Catalyst Media and G5 Entertainment

Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.68 times more return on investment than G5 Entertainment. However, Catalyst Media Group is 1.46 times less risky than G5 Entertainment. It trades about -0.05 of its potential returns per unit of risk. G5 Entertainment AB is currently generating about -0.04 per unit of risk. If you would invest  10,250  in Catalyst Media Group on October 5, 2024 and sell it today you would lose (2,250) from holding Catalyst Media Group or give up 21.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.88%
Values	Daily Returns

Catalyst Media Group  vs.  G5 Entertainment AB

Catalyst Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalyst Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

G5 Entertainment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in G5 Entertainment AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, G5 Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catalyst Media and G5 Entertainment

The main advantage of trading using opposite Catalyst Media and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, G5 Entertainment 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 G5 Entertainment will offset losses from the drop in G5 Entertainment's long position.

The idea behind Catalyst Media Group and G5 Entertainment AB 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.