Correlation Between Catalystsmh Total and Catalystexceed Defined

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

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

Diversification Opportunities for Catalystsmh Total and Catalystexceed Defined

0.88

Correlation Coefficient

Catalystsmh Total  Catalystexceed Defined

Very poor diversification

The 3 months correlation between Catalystsmh and Catalystexceed is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh Total Return and Catalystexceed Defined Shield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystexceed Defined and Catalystsmh Total 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 Catalystsmh Total Return are associated (or correlated) with Catalystexceed Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystexceed Defined has no effect on the direction of Catalystsmh Total i.e., Catalystsmh Total and Catalystexceed Defined go up and down completely randomly.

Pair Corralation between Catalystsmh Total and Catalystexceed Defined

Assuming the 90 days horizon Catalystsmh Total Return is expected to generate 1.55 times more return on investment than Catalystexceed Defined. However, Catalystsmh Total is 1.55 times more volatile than Catalystexceed Defined Shield. It trades about 0.23 of its potential returns per unit of risk. Catalystexceed Defined Shield is currently generating about 0.29 per unit of risk. If you would invest  434.00  in Catalystsmh Total Return on May 1, 2025 and sell it today you would earn a total of  44.00  from holding Catalystsmh Total Return or generate 10.14% return on investment over 90 days.

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

Catalystsmh Total Return  vs.  Catalystexceed Defined Shield

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

Catalystexceed Defined

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystexceed Defined Shield are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Catalystexceed Defined may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Catalystsmh Total and Catalystexceed Defined

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

The idea behind Catalystsmh Total Return and Catalystexceed Defined Shield 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.