Correlation Between Chrysalis Investments and Catalyst Media

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

By analyzing existing cross correlation between Chrysalis Investments and Catalyst Media Group, you can compare the effects of market volatilities on Chrysalis Investments and Catalyst Media 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 Chrysalis Investments with a short position of Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chrysalis Investments and Catalyst Media.

Diversification Opportunities for Chrysalis Investments and Catalyst Media

-0.72

Correlation Coefficient

Chrysalis Investments  Catalyst Media

Pay attention - limited upside

The 3 months correlation between Chrysalis and Catalyst is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group and Chrysalis Investments 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 Chrysalis Investments are associated (or correlated) with Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Chrysalis Investments i.e., Chrysalis Investments and Catalyst Media go up and down completely randomly.

Pair Corralation between Chrysalis Investments and Catalyst Media

Assuming the 90 days trading horizon Chrysalis Investments is expected to generate 0.79 times more return on investment than Catalyst Media. However, Chrysalis Investments is 1.27 times less risky than Catalyst Media. It trades about 0.13 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.09 per unit of risk. If you would invest  9,330  in Chrysalis Investments on September 30, 2024 and sell it today you would earn a total of  1,190  from holding Chrysalis Investments or generate 12.75% return on investment over 90 days.

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

Chrysalis Investments  vs.  Catalyst Media Group

Chrysalis Investments

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chrysalis Investments are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Chrysalis Investments may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Catalyst Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalyst Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Chrysalis Investments and Catalyst Media

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

The idea behind Chrysalis Investments and Catalyst Media Group 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.