Correlation Between Catalyst Metals and 05971U2D8

Can any of the company-specific risk be diversified away by investing in both Catalyst Metals and 05971U2D8 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 Metals and 05971U2D8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalyst Metals Limited and BCP 325 30 SEP 31, you can compare the effects of market volatilities on Catalyst Metals and 05971U2D8 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 Metals with a short position of 05971U2D8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Metals and 05971U2D8.

Diversification Opportunities for Catalyst Metals and 05971U2D8

0.16

Correlation Coefficient

Catalyst Metals  05971U2D8

Average diversification

The 3 months correlation between Catalyst and 05971U2D8 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Metals Limited and BCP 325 30 SEP 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCP 325 30 and Catalyst Metals 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 Metals Limited are associated (or correlated) with 05971U2D8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCP 325 30 has no effect on the direction of Catalyst Metals i.e., Catalyst Metals and 05971U2D8 go up and down completely randomly.

Pair Corralation between Catalyst Metals and 05971U2D8

Assuming the 90 days horizon Catalyst Metals Limited is expected to under-perform the 05971U2D8. In addition to that, Catalyst Metals is 21.09 times more volatile than BCP 325 30 SEP 31. It trades about -0.02 of its total potential returns per unit of risk. BCP 325 30 SEP 31 is currently generating about -0.15 per unit of volatility. If you would invest  9,495  in BCP 325 30 SEP 31 on October 10, 2024 and sell it today you would lose (15.00) from holding BCP 325 30 SEP 31 or give up 0.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	30.0%
Values	Daily Returns

Catalyst Metals Limited  vs.  BCP 325 30 SEP 31

Catalyst Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalyst Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BCP 325 30

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BCP 325 30 SEP 31 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, 05971U2D8 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Catalyst Metals and 05971U2D8

The main advantage of trading using opposite Catalyst Metals and 05971U2D8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Metals position performs unexpectedly, 05971U2D8 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 05971U2D8 will offset losses from the drop in 05971U2D8's long position.

The idea behind Catalyst Metals Limited and BCP 325 30 SEP 31 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.