Correlation Between Adams Natural and Catalyst Insider

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

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

Diversification Opportunities for Adams Natural and Catalyst Insider

0.18

Correlation Coefficient

Adams Natural  Catalyst Insider

Average diversification

The 3 months correlation between Adams and Catalyst is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources and Catalyst Insider Buying in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Insider Buying and Adams Natural 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 Adams Natural Resources are associated (or correlated) with Catalyst Insider. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Insider Buying has no effect on the direction of Adams Natural i.e., Adams Natural and Catalyst Insider go up and down completely randomly.

Pair Corralation between Adams Natural and Catalyst Insider

Considering the 90-day investment horizon Adams Natural Resources is expected to under-perform the Catalyst Insider. But the fund apears to be less risky and, when comparing its historical volatility, Adams Natural Resources is 1.63 times less risky than Catalyst Insider. The fund trades about -0.02 of its potential returns per unit of risk. The Catalyst Insider Buying is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,404  in Catalyst Insider Buying on July 25, 2025 and sell it today you would earn a total of  162.00  from holding Catalyst Insider Buying or generate 6.74% return on investment over 90 days.

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

Adams Natural Resources  vs.  Catalyst Insider Buying

Adams Natural Resources

Risk-Adjusted Performance

Weakest

Over the last 90 days Adams Natural Resources has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy technical and fundamental indicators, Adams Natural is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Catalyst Insider Buying

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Insider Buying are ranked lower than 6 (%) 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 November 2025.

Pair Trading with Adams Natural and Catalyst Insider

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

The idea behind Adams Natural Resources and Catalyst Insider Buying 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.