Correlation Between Small Cap and Catalystsmh Total

Can any of the company-specific risk be diversified away by investing in both Small Cap and Catalystsmh 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 Small Cap and Catalystsmh Total into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Small Cap Value Fund and Catalystsmh Total Return, you can compare the effects of market volatilities on Small Cap and Catalystsmh 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 Small Cap with a short position of Catalystsmh Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Catalystsmh Total.

Diversification Opportunities for Small Cap and Catalystsmh Total

0.89

Correlation Coefficient

Small Cap  Catalystsmh Total

Very poor diversification

The 3 months correlation between Small and Catalystsmh is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Value Fund 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 Small Cap 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 Small Cap Value Fund are associated (or correlated) with Catalystsmh 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 Small Cap i.e., Small Cap and Catalystsmh Total go up and down completely randomly.

Pair Corralation between Small Cap and Catalystsmh Total

Assuming the 90 days horizon Small Cap Value Fund is expected to generate 1.9 times more return on investment than Catalystsmh Total. However, Small Cap is 1.9 times more volatile than Catalystsmh Total Return. It trades about 0.15 of its potential returns per unit of risk. Catalystsmh Total Return is currently generating about 0.29 per unit of risk. If you would invest  3,429  in Small Cap Value Fund on May 27, 2025 and sell it today you would earn a total of  417.00  from holding Small Cap Value Fund or generate 12.16% return on investment over 90 days.

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

Small Cap Value Fund  vs.  Catalystsmh Total Return

Small Cap Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Value Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Small Cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Catalystsmh Total Return

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystsmh Total Return are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Catalystsmh Total may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Small Cap and Catalystsmh Total

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

The idea behind Small Cap Value Fund and Catalystsmh Total Return 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.