Correlation Between Technology Ultrasector and Catalyst Insider

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

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

Diversification Opportunities for Technology Ultrasector and Catalyst Insider

0.93

Correlation Coefficient

Technology Ultrasector  Catalyst Insider

Almost no diversification

The 3 months correlation between Technology and Catalyst is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Technology Ultrasector Profund 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 Technology Ultrasector 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 Technology Ultrasector Profund 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 Technology Ultrasector i.e., Technology Ultrasector and Catalyst Insider go up and down completely randomly.

Pair Corralation between Technology Ultrasector and Catalyst Insider

Assuming the 90 days horizon Technology Ultrasector Profund is expected to generate 1.52 times more return on investment than Catalyst Insider. However, Technology Ultrasector is 1.52 times more volatile than Catalyst Insider Buying. It trades about 0.3 of its potential returns per unit of risk. Catalyst Insider Buying is currently generating about 0.26 per unit of risk. If you would invest  3,163  in Technology Ultrasector Profund on May 7, 2025 and sell it today you would earn a total of  1,032  from holding Technology Ultrasector Profund or generate 32.63% return on investment over 90 days.

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

Technology Ultrasector Profund  vs.  Catalyst Insider Buying

Technology Ultrasector

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Technology Ultrasector Profund are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Technology Ultrasector showed solid returns over the last few months and may actually be approaching a breakup point.

Catalyst Insider Buying

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Insider Buying are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Catalyst Insider showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Technology Ultrasector and Catalyst Insider

The main advantage of trading using opposite Technology Ultrasector and Catalyst Insider positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technology Ultrasector 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 Technology Ultrasector Profund 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.