Correlation Between Catalystcifc Floating and Catalyst/warrington

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Can any of the company-specific risk be diversified away by investing in both Catalystcifc Floating and Catalyst/warrington 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 Catalystcifc Floating and Catalyst/warrington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystcifc Floating Rate and Catalystwarrington Strategic Program, you can compare the effects of market volatilities on Catalystcifc Floating and Catalyst/warrington 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 Catalystcifc Floating with a short position of Catalyst/warrington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystcifc Floating and Catalyst/warrington.

Diversification Opportunities for Catalystcifc Floating and Catalyst/warrington

-0.9
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Catalystcifc and Catalyst/warrington is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Catalystcifc Floating Rate and Catalystwarrington Strategic P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst/warrington and Catalystcifc Floating 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 Catalystcifc Floating Rate are associated (or correlated) with Catalyst/warrington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst/warrington has no effect on the direction of Catalystcifc Floating i.e., Catalystcifc Floating and Catalyst/warrington go up and down completely randomly.

Pair Corralation between Catalystcifc Floating and Catalyst/warrington

Assuming the 90 days horizon Catalystcifc Floating Rate is expected to generate 4.4 times more return on investment than Catalyst/warrington. However, Catalystcifc Floating is 4.4 times more volatile than Catalystwarrington Strategic Program. It trades about 0.32 of its potential returns per unit of risk. Catalystwarrington Strategic Program is currently generating about -0.13 per unit of risk. If you would invest  899.00  in Catalystcifc Floating Rate on May 1, 2025 and sell it today you would earn a total of  21.00  from holding Catalystcifc Floating Rate or generate 2.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Catalystcifc Floating Rate  vs.  Catalystwarrington Strategic P

 Performance 
       Timeline  
Catalystcifc Floating 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Catalystcifc Floating Rate are ranked lower than 24 (%) 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.
Catalyst/warrington 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Catalystwarrington Strategic Program has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Catalyst/warrington is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystcifc Floating and Catalyst/warrington Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Catalystcifc Floating and Catalyst/warrington

The main advantage of trading using opposite Catalystcifc Floating and Catalyst/warrington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystcifc Floating position performs unexpectedly, Catalyst/warrington 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/warrington will offset losses from the drop in Catalyst/warrington's long position.
The idea behind Catalystcifc Floating Rate and Catalystwarrington Strategic Program 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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