Correlation Between Rational Special and Catalyst Insider
Can any of the company-specific risk be diversified away by investing in both Rational Special 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 Rational Special and Catalyst Insider into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rational Special Situations and Catalyst Insider Income, you can compare the effects of market volatilities on Rational Special 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 Rational Special with a short position of Catalyst Insider. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational Special and Catalyst Insider.
Diversification Opportunities for Rational Special and Catalyst Insider
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rational and Catalyst is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Rational Special Situations and Catalyst Insider Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Insider Income and Rational Special 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 Rational Special Situations 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 Income has no effect on the direction of Rational Special i.e., Rational Special and Catalyst Insider go up and down completely randomly.
Pair Corralation between Rational Special and Catalyst Insider
Assuming the 90 days horizon Rational Special is expected to generate 1.53 times less return on investment than Catalyst Insider. But when comparing it to its historical volatility, Rational Special Situations is 1.12 times less risky than Catalyst Insider. It trades about 0.1 of its potential returns per unit of risk. Catalyst Insider Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 915.00 in Catalyst Insider Income on May 17, 2025 and sell it today you would earn a total of 11.00 from holding Catalyst Insider Income or generate 1.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Rational Special Situations vs. Catalyst Insider Income
Performance |
Timeline |
Rational Special Sit |
Catalyst Insider Income |
Rational Special and Catalyst Insider Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rational Special and Catalyst Insider
The main advantage of trading using opposite Rational Special and Catalyst Insider positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rational Special 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.Rational Special vs. Rationalrgn Hedged Equity | Rational Special vs. Rationalrgn Hedged Equity | Rational Special vs. Rationalrgn Hedged Equity | Rational Special vs. Rational Special Situations |
Catalyst Insider vs. Catalyst Enhanced Income | Catalyst Insider vs. Catalystmillburn Hedge Strategy | Catalyst Insider vs. Rational Special Situations | Catalyst Insider vs. Catalystprinceton Floating Rate |
Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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