Correlation Between Catalyst/smh High and Catalyst/smh Total
Can any of the company-specific risk be diversified away by investing in both Catalyst/smh High and Catalyst/smh Total 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/smh High and Catalyst/smh Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystsmh High Income and Catalystsmh Total Return, you can compare the effects of market volatilities on Catalyst/smh High and Catalyst/smh Total 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/smh High with a short position of Catalyst/smh Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/smh High and Catalyst/smh Total.
Diversification Opportunities for Catalyst/smh High and Catalyst/smh Total
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Catalyst/smh and Catalyst/smh is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Catalystsmh Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh Total Return and Catalyst/smh High 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 Catalystsmh High Income are associated (or correlated) with Catalyst/smh Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh Total Return has no effect on the direction of Catalyst/smh High i.e., Catalyst/smh High and Catalyst/smh Total go up and down completely randomly.
Pair Corralation between Catalyst/smh High and Catalyst/smh Total
Assuming the 90 days horizon Catalyst/smh High is expected to generate 1.1 times less return on investment than Catalyst/smh Total. But when comparing it to its historical volatility, Catalystsmh High Income is 1.08 times less risky than Catalyst/smh Total. It trades about 0.28 of its potential returns per unit of risk. Catalystsmh Total Return is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 463.00 in Catalystsmh Total Return on February 21, 2024 and sell it today you would earn a total of 10.00 from holding Catalystsmh Total Return or generate 2.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Catalystsmh High Income vs. Catalystsmh Total Return
Performance |
Timeline |
Catalystsmh High Income |
Catalystsmh Total Return |
Catalyst/smh High and Catalyst/smh Total Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catalyst/smh High and Catalyst/smh Total
The main advantage of trading using opposite Catalyst/smh High and Catalyst/smh Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/smh High position performs unexpectedly, Catalyst/smh Total 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/smh Total will offset losses from the drop in Catalyst/smh Total's long position.Catalyst/smh High vs. American High Income | Catalyst/smh High vs. HUMANA INC | Catalyst/smh High vs. Aquagold International | Catalyst/smh High vs. Barloworld Ltd ADR |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |