Correlation Between Everyman Media and Catalyst Media

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

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

Diversification Opportunities for Everyman Media and Catalyst Media

-0.64

Correlation Coefficient

Everyman Media  Catalyst Media

Excellent diversification

The 3 months correlation between Everyman and Catalyst is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Everyman Media Group 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 Everyman 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 Everyman Media Group 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 Everyman Media i.e., Everyman Media and Catalyst Media go up and down completely randomly.

Pair Corralation between Everyman Media and Catalyst Media

Assuming the 90 days trading horizon Everyman Media Group is expected to under-perform the Catalyst Media. But the stock apears to be less risky and, when comparing its historical volatility, Everyman Media Group is 1.24 times less risky than Catalyst Media. The stock trades about -0.16 of its potential returns per unit of risk. The Catalyst Media Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,500  in Catalyst Media Group on September 3, 2024 and sell it today you would earn a total of  500.00  from holding Catalyst Media Group or generate 5.88% return on investment over 90 days.

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

Everyman Media Group  vs.  Catalyst Media Group

Everyman Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everyman Media Group 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 basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Catalyst Media Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Media Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Catalyst Media may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Everyman Media and Catalyst Media

The main advantage of trading using opposite Everyman Media and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everyman Media 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 Everyman Media Group 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.