Correlation Between Catalyst/exceed Defined and Catalyst/smh Total

Can any of the company-specific risk be diversified away by investing in both Catalyst/exceed Defined and Catalyst/smh 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 Catalyst/exceed Defined and Catalyst/smh Total into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalystexceed Defined Shield and Catalystsmh Total Return, you can compare the effects of market volatilities on Catalyst/exceed Defined and Catalyst/smh 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 Catalyst/exceed Defined with a short position of Catalyst/smh Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/exceed Defined and Catalyst/smh Total.

Diversification Opportunities for Catalyst/exceed Defined and Catalyst/smh Total

0.97

Correlation Coefficient

Catalyst/exceed Defined  Catalyst/smh Total

Almost no diversification

The 3 months correlation between Catalyst/exceed and Catalyst/smh is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Catalystexceed Defined Shield 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 Catalyst/exceed Defined 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 Catalystexceed Defined Shield are associated (or correlated) with Catalyst/smh 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 Catalyst/exceed Defined i.e., Catalyst/exceed Defined and Catalyst/smh Total go up and down completely randomly.

Pair Corralation between Catalyst/exceed Defined and Catalyst/smh Total

Assuming the 90 days horizon Catalyst/exceed Defined is expected to generate 2.45 times less return on investment than Catalyst/smh Total. But when comparing it to its historical volatility, Catalystexceed Defined Shield is 2.3 times less risky than Catalyst/smh Total. It trades about 0.27 of its potential returns per unit of risk. Catalystsmh Total Return is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  435.00  in Catalystsmh Total Return on May 25, 2025 and sell it today you would earn a total of  54.00  from holding Catalystsmh Total Return or generate 12.41% return on investment over 90 days.

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

Catalystexceed Defined Shield  vs.  Catalystsmh Total Return

Catalyst/exceed Defined

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystexceed Defined Shield are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Catalyst/exceed Defined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Catalyst/smh Total may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Catalyst/exceed Defined and Catalyst/smh Total

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

The idea behind Catalystexceed Defined Shield 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.