Correlation Between Catalyst Media and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Polar Capital 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 Polar Capital 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 Polar Capital Technology, you can compare the effects of market volatilities on Catalyst Media and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Polar Capital.
Diversification Opportunities for Catalyst Media and Polar Capital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst and Polar is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Catalyst Media i.e., Catalyst Media and Polar Capital go up and down completely randomly.
Pair Corralation between Catalyst Media and Polar Capital
Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the Polar Capital. In addition to that, Catalyst Media is 1.46 times more volatile than Polar Capital Technology. It trades about -0.2 of its total potential returns per unit of risk. Polar Capital Technology is currently generating about -0.11 per unit of volatility. If you would invest 34,700 in Polar Capital Technology on December 30, 2024 and sell it today you would lose (4,950) from holding Polar Capital Technology or give up 14.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Catalyst Media Group vs. Polar Capital Technology
Performance |
Timeline |
Catalyst Media Group |
Polar Capital Technology |
Catalyst Media and Polar Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catalyst Media and Polar Capital
The main advantage of trading using opposite Catalyst Media and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Media position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.Catalyst Media vs. Allianz Technology Trust | Catalyst Media vs. Ashtead Technology Holdings | Catalyst Media vs. Cairn Homes PLC | Catalyst Media vs. Cognizant Technology Solutions |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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