Correlation Between Great West and Catalystmap Global

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

By analyzing existing cross correlation between Great West Inflation Protected Securities and Catalystmap Global Balanced, you can compare the effects of market volatilities on Great West and Catalystmap Global 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 Great West with a short position of Catalystmap Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Catalystmap Global.

Diversification Opportunities for Great West and Catalystmap Global

0.81

Correlation Coefficient

Great West  Catalystmap Global

Very poor diversification

The 3 months correlation between Great and Catalystmap is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Great West Inflation Protected and Catalystmap Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmap Global and Great West 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 Great West Inflation Protected Securities are associated (or correlated) with Catalystmap Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmap Global has no effect on the direction of Great West i.e., Great West and Catalystmap Global go up and down completely randomly.

Pair Corralation between Great West and Catalystmap Global

Assuming the 90 days horizon Great West is expected to generate 1.99 times less return on investment than Catalystmap Global. But when comparing it to its historical volatility, Great West Inflation Protected Securities is 1.53 times less risky than Catalystmap Global. It trades about 0.14 of its potential returns per unit of risk. Catalystmap Global Balanced is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,149  in Catalystmap Global Balanced on May 4, 2025 and sell it today you would earn a total of  40.00  from holding Catalystmap Global Balanced or generate 3.48% return on investment over 90 days.

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

Great West Inflation Protected  vs.  Catalystmap Global Balanced

Great West Inflation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Inflation Protected Securities are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Great West is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystmap Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmap Global Balanced are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Catalystmap Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Great West and Catalystmap Global

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

The idea behind Great West Inflation Protected Securities and Catalystmap Global Balanced 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.