Correlation Between Catalyst/map Global and Catalyst/smh Total
Can any of the company-specific risk be diversified away by investing in both Catalyst/map Global 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/map Global 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 Catalystmap Global Balanced and Catalystsmh Total Return, you can compare the effects of market volatilities on Catalyst/map Global 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/map Global with a short position of Catalyst/smh Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/map Global and Catalyst/smh Total.
Diversification Opportunities for Catalyst/map Global and Catalyst/smh Total
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalyst/map and Catalyst/smh is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmap Global Balanced 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/map Global 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 Catalystmap Global Balanced 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/map Global i.e., Catalyst/map Global and Catalyst/smh Total go up and down completely randomly.
Pair Corralation between Catalyst/map Global and Catalyst/smh Total
Assuming the 90 days horizon Catalyst/map Global is expected to generate 1.58 times less return on investment than Catalyst/smh Total. But when comparing it to its historical volatility, Catalystmap Global Balanced is 2.47 times less risky than Catalyst/smh Total. It trades about 0.39 of its potential returns per unit of risk. Catalystsmh Total Return is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 435.00 in Catalystsmh Total Return on April 25, 2025 and sell it today you would earn a total of 50.00 from holding Catalystsmh Total Return or generate 11.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Catalystmap Global Balanced vs. Catalystsmh Total Return
Performance |
Timeline |
Catalyst/map Global |
Catalystsmh Total Return |
Catalyst/map Global and Catalyst/smh Total Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catalyst/map Global and Catalyst/smh Total
The main advantage of trading using opposite Catalyst/map Global and Catalyst/smh Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/map Global 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.Catalyst/map Global vs. Transamerica Emerging Markets | Catalyst/map Global vs. Ab E Opportunities | Catalyst/map Global vs. Tfa Tactical Income | Catalyst/map Global vs. Franklin Emerging Market |
Catalyst/smh Total vs. Catalystsmh High Income | Catalyst/smh Total vs. Catalystsmh High Income | Catalyst/smh Total vs. Catalystsmh High Income | Catalyst/smh Total vs. Catalystsmh Total Return |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |