Correlation Between Catalyst Media and Liontrust Asset

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

Diversification Opportunities for Catalyst Media and Liontrust Asset

0.25

Correlation Coefficient

Catalyst Media  Liontrust Asset

Modest diversification

The 3 months correlation between Catalyst and Liontrust is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana 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 Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of Catalyst Media i.e., Catalyst Media and Liontrust Asset go up and down completely randomly.

Pair Corralation between Catalyst Media and Liontrust Asset

Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the Liontrust Asset. In addition to that, Catalyst Media is 1.83 times more volatile than Liontrust Asset Management. It trades about -0.27 of its total potential returns per unit of risk. Liontrust Asset Management is currently generating about -0.26 per unit of volatility. If you would invest  45,050  in Liontrust Asset Management on December 4, 2024 and sell it today you would lose (4,000) from holding Liontrust Asset Management or give up 8.88% of portfolio value over 90 days.

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

Catalyst Media Group  vs.  Liontrust Asset Management

Catalyst Media Group

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Liontrust Asset Mana

Risk-Adjusted Performance

Very Weak

Over the last 90 days Liontrust Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Catalyst Media and Liontrust Asset

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

The idea behind Catalyst Media Group and Liontrust Asset Management 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.