Correlation Between Davis Financial and Catalyst Exceed

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

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

Diversification Opportunities for Davis Financial and Catalyst Exceed

0.96

Correlation Coefficient

Davis Financial  Catalyst Exceed

Almost no diversification

The 3 months correlation between Davis and Catalyst is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Davis Financial Fund and Catalyst Exceed Defined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Exceed Defined and Davis Financial 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 Davis Financial Fund are associated (or correlated) with Catalyst Exceed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Exceed Defined has no effect on the direction of Davis Financial i.e., Davis Financial and Catalyst Exceed go up and down completely randomly.

Pair Corralation between Davis Financial and Catalyst Exceed

Assuming the 90 days horizon Davis Financial is expected to generate 1.1 times less return on investment than Catalyst Exceed. In addition to that, Davis Financial is 1.12 times more volatile than Catalyst Exceed Defined. It trades about 0.2 of its total potential returns per unit of risk. Catalyst Exceed Defined is currently generating about 0.25 per unit of volatility. If you would invest  1,139  in Catalyst Exceed Defined on May 3, 2025 and sell it today you would earn a total of  138.00  from holding Catalyst Exceed Defined or generate 12.12% return on investment over 90 days.

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

Davis Financial Fund  vs.  Catalyst Exceed Defined

Davis Financial

Risk-Adjusted Performance

Solid

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

Catalyst Exceed Defined

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Exceed Defined are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Catalyst Exceed may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Davis Financial and Catalyst Exceed

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

The idea behind Davis Financial Fund and Catalyst Exceed Defined 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.