Correlation Between Catalyst Insider and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Catalyst Insider and Dow Jones 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 Insider and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Insider Buying and Dow Jones Industrial, you can compare the effects of market volatilities on Catalyst Insider and Dow Jones 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 Insider with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Insider and Dow Jones.
Diversification Opportunities for Catalyst Insider and Dow Jones
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Catalyst and Dow is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Insider Buying and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Catalyst Insider 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 Insider Buying are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Catalyst Insider i.e., Catalyst Insider and Dow Jones go up and down completely randomly.
Pair Corralation between Catalyst Insider and Dow Jones
Assuming the 90 days horizon Catalyst Insider Buying is expected to under-perform the Dow Jones. In addition to that, Catalyst Insider is 2.0 times more volatile than Dow Jones Industrial. It trades about -0.05 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.02 per unit of volatility. If you would invest 4,429,313 in Dow Jones Industrial on September 11, 2024 and sell it today you would earn a total of 10,880 from holding Dow Jones Industrial or generate 0.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Catalyst Insider Buying vs. Dow Jones Industrial
Performance |
Timeline |
Catalyst Insider and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Catalyst Insider Buying
Pair trading matchups for Catalyst Insider
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Catalyst Insider and Dow Jones
The main advantage of trading using opposite Catalyst Insider and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Insider position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Catalyst Insider vs. Aqr Large Cap | Catalyst Insider vs. Old Westbury Large | Catalyst Insider vs. Morningstar Unconstrained Allocation | Catalyst Insider vs. Enhanced Large Pany |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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