Correlation Between Wmcanx and Catalyst/aspect Enhanced

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

By analyzing existing cross correlation between Wmcanx and Catalystaspect Enhanced Multi Asset, you can compare the effects of market volatilities on Wmcanx and Catalyst/aspect Enhanced 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 Wmcanx with a short position of Catalyst/aspect Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wmcanx and Catalyst/aspect Enhanced.

Diversification Opportunities for Wmcanx and Catalyst/aspect Enhanced

0.98

Correlation Coefficient

Wmcanx  Catalyst/aspect Enhanced

Almost no diversification

The 3 months correlation between Wmcanx and Catalyst/aspect is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Wmcanx and Catalystaspect Enhanced Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst/aspect Enhanced and Wmcanx 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 Wmcanx are associated (or correlated) with Catalyst/aspect Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst/aspect Enhanced has no effect on the direction of Wmcanx i.e., Wmcanx and Catalyst/aspect Enhanced go up and down completely randomly.

Pair Corralation between Wmcanx and Catalyst/aspect Enhanced

Assuming the 90 days trading horizon Wmcanx is expected to generate 0.86 times more return on investment than Catalyst/aspect Enhanced. However, Wmcanx is 1.16 times less risky than Catalyst/aspect Enhanced. It trades about 0.35 of its potential returns per unit of risk. Catalystaspect Enhanced Multi Asset is currently generating about 0.28 per unit of risk. If you would invest  1,609  in Wmcanx on April 23, 2025 and sell it today you would earn a total of  208.00  from holding Wmcanx or generate 12.93% return on investment over 90 days.

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

Wmcanx  vs.  Catalystaspect Enhanced Multi

Wmcanx

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Wmcanx are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Wmcanx showed solid returns over the last few months and may actually be approaching a breakup point.

Catalyst/aspect Enhanced

Risk-Adjusted Performance

Solid

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

Pair Trading with Wmcanx and Catalyst/aspect Enhanced

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

The idea behind Wmcanx and Catalystaspect Enhanced Multi Asset 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.