Correlation Between Catalyst Exceed and Catalyst/smh Total
Can any of the company-specific risk be diversified away by investing in both Catalyst Exceed 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 Exceed 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 Catalyst Exceed Defined and Catalystsmh Total Return, you can compare the effects of market volatilities on Catalyst Exceed 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 Exceed with a short position of Catalyst/smh Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Exceed and Catalyst/smh Total.
Diversification Opportunities for Catalyst Exceed and Catalyst/smh Total
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalyst and Catalyst/smh is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Exceed Defined 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 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 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 Exceed i.e., Catalyst Exceed and Catalyst/smh Total go up and down completely randomly.
Pair Corralation between Catalyst Exceed and Catalyst/smh Total
Assuming the 90 days horizon Catalyst Exceed Defined is expected to generate 1.14 times more return on investment than Catalyst/smh Total. However, Catalyst Exceed is 1.14 times more volatile than Catalystsmh Total Return. It trades about 0.29 of its potential returns per unit of risk. Catalystsmh Total Return is currently generating about 0.27 per unit of risk. If you would invest 1,119 in Catalyst Exceed Defined on April 26, 2025 and sell it today you would earn a total of 161.00 from holding Catalyst Exceed Defined or generate 14.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Catalyst Exceed Defined vs. Catalystsmh Total Return
Performance |
Timeline |
Catalyst Exceed Defined |
Catalystsmh Total Return |
Catalyst Exceed and Catalyst/smh Total Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catalyst Exceed and Catalyst/smh Total
The main advantage of trading using opposite Catalyst Exceed and Catalyst/smh Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Exceed 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 Exceed vs. Calvert Bond Portfolio | Catalyst Exceed vs. Bbh Intermediate Municipal | Catalyst Exceed vs. Gmo High Yield | Catalyst Exceed vs. The National Tax Free |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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