Correlation Between Catalyst Insider and Catalyst Enhanced

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

By analyzing existing cross correlation between Catalyst Insider Buying and Catalyst Enhanced Income, you can compare the effects of market volatilities on Catalyst Insider and Catalyst Enhanced 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 Insider with a short position of Catalyst Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Insider and Catalyst Enhanced.

Diversification Opportunities for Catalyst Insider and Catalyst Enhanced

-0.51

Correlation Coefficient

Catalyst Insider  Catalyst Enhanced

Excellent diversification

The 3 months correlation between Catalyst and Catalyst is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Insider Buying and Catalyst Enhanced Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Enhanced Income and Catalyst Insider 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 Insider Buying are associated (or correlated) with Catalyst Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Enhanced Income has no effect on the direction of Catalyst Insider i.e., Catalyst Insider and Catalyst Enhanced go up and down completely randomly.

Pair Corralation between Catalyst Insider and Catalyst Enhanced

If you would invest  2,081  in Catalyst Insider Buying on March 19, 2025 and sell it today you would earn a total of  204.00  from holding Catalyst Insider Buying or generate 9.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Catalyst Insider Buying  vs.  Catalyst Enhanced Income

Catalyst Insider Buying

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Insider Buying are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Catalyst Insider may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Catalyst Enhanced Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catalyst Enhanced Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Catalyst Enhanced 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 Insider and Catalyst Enhanced

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

The idea behind Catalyst Insider Buying and Catalyst Enhanced 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.