Correlation Between Catalyst Exceed and Small-cap Profund

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

By analyzing existing cross correlation between Catalyst Exceed Defined and Small Cap Profund Small Cap, you can compare the effects of market volatilities on Catalyst Exceed and Small-cap Profund 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 Exceed with a short position of Small-cap Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Exceed and Small-cap Profund.

Diversification Opportunities for Catalyst Exceed and Small-cap Profund

0.93

Correlation Coefficient

Catalyst Exceed  Small-cap Profund

Almost no diversification

The 3 months correlation between Catalyst and SMALL-CAP is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Exceed Defined and Small Cap Profund Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Profund and Catalyst Exceed 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 Catalyst Exceed Defined are associated (or correlated) with Small-cap Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Profund has no effect on the direction of Catalyst Exceed i.e., Catalyst Exceed and Small-cap Profund go up and down completely randomly.

Pair Corralation between Catalyst Exceed and Small-cap Profund

Assuming the 90 days horizon Catalyst Exceed is expected to generate 2.47 times less return on investment than Small-cap Profund. But when comparing it to its historical volatility, Catalyst Exceed Defined is 1.73 times less risky than Small-cap Profund. It trades about 0.12 of its potential returns per unit of risk. Small Cap Profund Small Cap is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  10,526  in Small Cap Profund Small Cap on May 25, 2025 and sell it today you would earn a total of  1,344  from holding Small Cap Profund Small Cap or generate 12.77% return on investment over 90 days.

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

Catalyst Exceed Defined  vs.  Small Cap Profund Small Cap

Catalyst Exceed Defined

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Exceed Defined are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Catalyst Exceed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Small Cap Profund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Profund Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Small-cap Profund showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catalyst Exceed and Small-cap Profund

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

The idea behind Catalyst Exceed Defined and Small Cap Profund Small Cap 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.