Correlation Between Eurasia Mining and Catalyst Media

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

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

Diversification Opportunities for Eurasia Mining and Catalyst Media

0.29

Correlation Coefficient

Eurasia Mining  Catalyst Media

Modest diversification

The 3 months correlation between Eurasia and Catalyst is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eurasia Mining 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 Eurasia Mining 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 Eurasia Mining 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 Eurasia Mining i.e., Eurasia Mining and Catalyst Media go up and down completely randomly.

Pair Corralation between Eurasia Mining and Catalyst Media

Assuming the 90 days trading horizon Eurasia Mining is expected to generate 1.46 times more return on investment than Catalyst Media. However, Eurasia Mining is 1.46 times more volatile than Catalyst Media Group. It trades about -0.02 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.23 per unit of risk. If you would invest  145.00  in Eurasia Mining on March 4, 2024 and sell it today you would lose (7.00) from holding Eurasia Mining or give up 4.83% of portfolio value over 90 days.

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

Eurasia Mining  vs.  Catalyst Media Group

Eurasia Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eurasia Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Eurasia Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 uncertain performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Eurasia Mining and Catalyst Media

The main advantage of trading using opposite Eurasia Mining and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurasia Mining 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 Eurasia Mining 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.