Correlation Between Perkins Small and Catalystsmh Total

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

By analyzing existing cross correlation between Perkins Small Cap and Catalystsmh Total Return, you can compare the effects of market volatilities on Perkins Small and Catalystsmh 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 Perkins Small with a short position of Catalystsmh Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perkins Small and Catalystsmh Total.

Diversification Opportunities for Perkins Small and Catalystsmh Total

0.67

Correlation Coefficient

Perkins Small  Catalystsmh Total

Poor diversification

The 3 months correlation between Perkins and Catalystsmh is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Perkins Small Cap 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 Perkins Small 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 Perkins Small Cap are associated (or correlated) with Catalystsmh 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 Perkins Small i.e., Perkins Small and Catalystsmh Total go up and down completely randomly.

Pair Corralation between Perkins Small and Catalystsmh Total

Assuming the 90 days horizon Perkins Small is expected to generate 1.0 times less return on investment than Catalystsmh Total. In addition to that, Perkins Small is 1.81 times more volatile than Catalystsmh Total Return. It trades about 0.18 of its total potential returns per unit of risk. Catalystsmh Total Return is currently generating about 0.32 per unit of volatility. If you would invest  431.00  in Catalystsmh Total Return on May 28, 2025 and sell it today you would earn a total of  58.00  from holding Catalystsmh Total Return or generate 13.46% return on investment over 90 days.

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

Perkins Small Cap  vs.  Catalystsmh Total Return

Perkins Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perkins Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Perkins Small showed solid returns over the last few months and may actually be approaching a breakup point.

Catalystsmh Total Return

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystsmh Total Return are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Catalystsmh Total showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perkins Small and Catalystsmh Total

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

The idea behind Perkins Small Cap and Catalystsmh Total Return 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.