Correlation Between CatchMark Timber and American Tower

Can any of the company-specific risk be diversified away by investing in both CatchMark Timber and American Tower 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 CatchMark Timber and American Tower into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CatchMark Timber Trust and American Tower Corp, you can compare the effects of market volatilities on CatchMark Timber and American Tower 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 CatchMark Timber with a short position of American Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of CatchMark Timber and American Tower.

Diversification Opportunities for CatchMark Timber and American Tower

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Correlation Coefficient

CatchMark Timber  American Tower

Pay attention - limited upside

The 3 months correlation between CatchMark and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CatchMark Timber Trust and American Tower Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Tower Corp and CatchMark Timber 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 CatchMark Timber Trust are associated (or correlated) with American Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Tower Corp has no effect on the direction of CatchMark Timber i.e., CatchMark Timber and American Tower go up and down completely randomly.

Pair Corralation between CatchMark Timber and American Tower

Considering the 90-day investment horizon CatchMark Timber Trust is expected to generate 2.66 times more return on investment than American Tower. However, CatchMark Timber is 2.66 times more volatile than American Tower Corp. It trades about 0.07 of its potential returns per unit of risk. American Tower Corp is currently generating about -0.02 per unit of risk. If you would invest  832.00  in CatchMark Timber Trust on January 26, 2024 and sell it today you would earn a total of  205.00  from holding CatchMark Timber Trust or generate 24.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	18.38%
Values	Daily Returns

CatchMark Timber Trust  vs.  American Tower Corp

CatchMark Timber Trust

Risk-Adjusted Performance

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Very Weak

Over the last 90 days CatchMark Timber Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CatchMark Timber is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

American Tower Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Tower Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with CatchMark Timber and American Tower

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

The idea behind CatchMark Timber Trust and American Tower Corp 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.