Correlation Between Catalyst Metals and ARN Media
Can any of the company-specific risk be diversified away by investing in both Catalyst Metals and ARN Media 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 ARN Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Metals and ARN Media Limited, you can compare the effects of market volatilities on Catalyst Metals and ARN Media 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 ARN Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Metals and ARN Media.
Diversification Opportunities for Catalyst Metals and ARN Media
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catalyst and ARN is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Metals and ARN Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARN Media Limited 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 are associated (or correlated) with ARN Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARN Media Limited has no effect on the direction of Catalyst Metals i.e., Catalyst Metals and ARN Media go up and down completely randomly.
Pair Corralation between Catalyst Metals and ARN Media
Assuming the 90 days trading horizon Catalyst Metals is expected to generate 1.83 times more return on investment than ARN Media. However, Catalyst Metals is 1.83 times more volatile than ARN Media Limited. It trades about 0.25 of its potential returns per unit of risk. ARN Media Limited is currently generating about -0.18 per unit of risk. If you would invest 354.00 in Catalyst Metals on December 5, 2024 and sell it today you would earn a total of 69.00 from holding Catalyst Metals or generate 19.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Catalyst Metals vs. ARN Media Limited
Performance |
Timeline |
Catalyst Metals |
ARN Media Limited |
Catalyst Metals and ARN Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catalyst Metals and ARN Media
The main advantage of trading using opposite Catalyst Metals and ARN Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Metals position performs unexpectedly, ARN Media 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 ARN Media will offset losses from the drop in ARN Media's long position.Catalyst Metals vs. The Environmental Group | Catalyst Metals vs. Hotel Property Investments | Catalyst Metals vs. Home Consortium | Catalyst Metals vs. Flagship Investments |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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