Correlation Between Catalystmap Global and Catalystcifc Floating

Can any of the company-specific risk be diversified away by investing in both Catalystmap Global and Catalystcifc Floating 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 Catalystmap Global and Catalystcifc Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalystmap Global Balanced and Catalystcifc Floating Rate, you can compare the effects of market volatilities on Catalystmap Global and Catalystcifc Floating 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 Catalystmap Global with a short position of Catalystcifc Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystmap Global and Catalystcifc Floating.

Diversification Opportunities for Catalystmap Global and Catalystcifc Floating

-0.63

Correlation Coefficient

Catalystmap Global  Catalystcifc Floating

Excellent diversification

The 3 months correlation between Catalystmap and Catalystcifc is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmap Global Balanced and Catalystcifc Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystcifc Floating and Catalystmap Global 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 Catalystmap Global Balanced are associated (or correlated) with Catalystcifc Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystcifc Floating has no effect on the direction of Catalystmap Global i.e., Catalystmap Global and Catalystcifc Floating go up and down completely randomly.

Pair Corralation between Catalystmap Global and Catalystcifc Floating

Assuming the 90 days horizon Catalystmap Global Balanced is expected to under-perform the Catalystcifc Floating. In addition to that, Catalystmap Global is 2.48 times more volatile than Catalystcifc Floating Rate. It trades about -0.02 of its total potential returns per unit of risk. Catalystcifc Floating Rate is currently generating about 0.3 per unit of volatility. If you would invest  910.00  in Catalystcifc Floating Rate on September 13, 2024 and sell it today you would earn a total of  18.00  from holding Catalystcifc Floating Rate or generate 1.98% return on investment over 90 days.

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

Catalystmap Global Balanced  vs.  Catalystcifc Floating Rate

Catalystmap Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalystmap Global Balanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Catalystmap Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystcifc Floating

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystcifc Floating Rate are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Catalystcifc Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Catalystmap Global and Catalystcifc Floating

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

The idea behind Catalystmap Global Balanced and Catalystcifc Floating Rate 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.