Correlation Between Catalyst Exceed and Intermediate Term

Can any of the company-specific risk be diversified away by investing in both Catalyst Exceed and Intermediate Term 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 Intermediate Term 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 Intermediate Term Bond Fund, you can compare the effects of market volatilities on Catalyst Exceed and Intermediate Term 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 Intermediate Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Exceed and Intermediate Term.

Diversification Opportunities for Catalyst Exceed and Intermediate Term

0.67

Correlation Coefficient

Catalyst Exceed  Intermediate Term

Poor diversification

The 3 months correlation between Catalyst and Intermediate is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Exceed Defined and Intermediate Term Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Term Bond 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 Intermediate Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Term Bond has no effect on the direction of Catalyst Exceed i.e., Catalyst Exceed and Intermediate Term go up and down completely randomly.

Pair Corralation between Catalyst Exceed and Intermediate Term

Assuming the 90 days horizon Catalyst Exceed Defined is expected to generate 2.88 times more return on investment than Intermediate Term. However, Catalyst Exceed is 2.88 times more volatile than Intermediate Term Bond Fund. It trades about 0.38 of its potential returns per unit of risk. Intermediate Term Bond Fund is currently generating about 0.12 per unit of risk. If you would invest  1,047  in Catalyst Exceed Defined on April 21, 2025 and sell it today you would earn a total of  233.00  from holding Catalyst Exceed Defined or generate 22.25% return on investment over 90 days.

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

Catalyst Exceed Defined  vs.  Intermediate Term Bond Fund

Catalyst Exceed Defined

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Exceed Defined are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Catalyst Exceed showed solid returns over the last few months and may actually be approaching a breakup point.

Intermediate Term Bond

Risk-Adjusted Performance

OK

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

Pair Trading with Catalyst Exceed and Intermediate Term

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

The idea behind Catalyst Exceed Defined and Intermediate Term Bond Fund 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.