Correlation Between 05971U2D8 and Catalyst Metals

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

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

Diversification Opportunities for 05971U2D8 and Catalyst Metals

0.15

Correlation Coefficient

05971U2D8  Catalyst Metals

Average diversification

The 3 months correlation between 05971U2D8 and Catalyst is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BCP 325 30 SEP 31 and Catalyst Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Metals and 05971U2D8 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 BCP 325 30 SEP 31 are associated (or correlated) with Catalyst Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Metals has no effect on the direction of 05971U2D8 i.e., 05971U2D8 and Catalyst Metals go up and down completely randomly.

Pair Corralation between 05971U2D8 and Catalyst Metals

Assuming the 90 days trading horizon BCP 325 30 SEP 31 is expected to generate 0.05 times more return on investment than Catalyst Metals. However, BCP 325 30 SEP 31 is 21.09 times less risky than Catalyst Metals. It trades about -0.15 of its potential returns per unit of risk. Catalyst Metals Limited is currently generating about -0.02 per unit of risk. 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

BCP 325 30 SEP 31  vs.  Catalyst Metals Limited

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.

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 weak 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.

Pair Trading with 05971U2D8 and Catalyst Metals

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

The idea behind BCP 325 30 SEP 31 and Catalyst Metals Limited 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.