Correlation Between Catalystlyons Tactical and Catalystsmh High

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

By analyzing existing cross correlation between Catalystlyons Tactical Allocation and Catalystsmh High Income, you can compare the effects of market volatilities on Catalystlyons Tactical and Catalystsmh High 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 Catalystlyons Tactical with a short position of Catalystsmh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystlyons Tactical and Catalystsmh High.

Diversification Opportunities for Catalystlyons Tactical and Catalystsmh High

0.9

Correlation Coefficient

Catalystlyons Tactical  Catalystsmh High

Almost no diversification

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

Pair Corralation between Catalystlyons Tactical and Catalystsmh High

Assuming the 90 days horizon Catalystlyons Tactical Allocation is expected to generate 1.71 times more return on investment than Catalystsmh High. However, Catalystlyons Tactical is 1.71 times more volatile than Catalystsmh High Income. It trades about 0.21 of its potential returns per unit of risk. Catalystsmh High Income is currently generating about 0.34 per unit of risk. If you would invest  1,480  in Catalystlyons Tactical Allocation on May 1, 2025 and sell it today you would earn a total of  157.00  from holding Catalystlyons Tactical Allocation or generate 10.61% return on investment over 90 days.

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

Catalystlyons Tactical Allocat  vs.  Catalystsmh High Income

Catalystlyons Tactical

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystlyons Tactical Allocation are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Catalystlyons Tactical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Catalystsmh High Income

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystsmh High Income are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Catalystsmh High may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Catalystlyons Tactical and Catalystsmh High

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

The idea behind Catalystlyons Tactical Allocation and Catalystsmh High Income 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.