Correlation Between Small Midcap and Catalyst Exceed

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

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

Diversification Opportunities for Small Midcap and Catalyst Exceed

0.85

Correlation Coefficient

Small Midcap  Catalyst Exceed

Very poor diversification

The 3 months correlation between Small and Catalyst is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Small Midcap Dividend Income 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 Small Midcap 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 Small Midcap Dividend Income 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 Small Midcap i.e., Small Midcap and Catalyst Exceed go up and down completely randomly.

Pair Corralation between Small Midcap and Catalyst Exceed

Assuming the 90 days horizon Small Midcap is expected to generate 2.56 times less return on investment than Catalyst Exceed. In addition to that, Small Midcap is 1.34 times more volatile than Catalyst Exceed Defined. It trades about 0.06 of its total potential returns per unit of risk. Catalyst Exceed Defined is currently generating about 0.19 per unit of volatility. If you would invest  1,297  in Catalyst Exceed Defined on May 10, 2025 and sell it today you would earn a total of  102.00  from holding Catalyst Exceed Defined or generate 7.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Small Midcap Dividend Income  vs.  Catalyst Exceed Defined

Small Midcap Dividend

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Small Midcap Dividend Income are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Small Midcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalyst Exceed Defined

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Exceed Defined are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Catalyst Exceed may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Small Midcap and Catalyst Exceed

The main advantage of trading using opposite Small Midcap and Catalyst Exceed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Midcap 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 Small Midcap Dividend Income 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.