Correlation Between Catalyst Media and Impax Asset

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

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

Diversification Opportunities for Catalyst Media and Impax Asset

-0.36

Correlation Coefficient

Catalyst Media  Impax Asset

Very good diversification

The 3 months correlation between Catalyst and Impax is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Media Group and Impax Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Asset Management and Catalyst Media 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 Catalyst Media Group are associated (or correlated) with Impax Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Asset Management has no effect on the direction of Catalyst Media i.e., Catalyst Media and Impax Asset go up and down completely randomly.

Pair Corralation between Catalyst Media and Impax Asset

Assuming the 90 days trading horizon Catalyst Media Group is expected to generate 0.81 times more return on investment than Impax Asset. However, Catalyst Media Group is 1.23 times less risky than Impax Asset. It trades about 0.03 of its potential returns per unit of risk. Impax Asset Management is currently generating about -0.09 per unit of risk. If you would invest  8,500  in Catalyst Media Group on September 13, 2024 and sell it today you would earn a total of  250.00  from holding Catalyst Media Group or generate 2.94% return on investment over 90 days.

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

Catalyst Media Group  vs.  Impax Asset Management

Catalyst Media Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Media Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Catalyst Media is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Impax Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impax Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Catalyst Media and Impax Asset

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

The idea behind Catalyst Media Group and Impax Asset Management 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.