Correlation Between Catalyst Media and Centaur Media

Can any of the company-specific risk be diversified away by investing in both Catalyst Media and Centaur 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 Catalyst Media and Centaur Media 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 Centaur Media, you can compare the effects of market volatilities on Catalyst Media and Centaur 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 Catalyst Media with a short position of Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Media and Centaur Media.

Diversification Opportunities for Catalyst Media and Centaur Media

0.72

Correlation Coefficient

Catalyst Media  Centaur Media

Poor diversification

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

Pair Corralation between Catalyst Media and Centaur Media

Assuming the 90 days trading horizon Catalyst Media Group is expected to under-perform the Centaur Media. But the stock apears to be less risky and, when comparing its historical volatility, Catalyst Media Group is 2.59 times less risky than Centaur Media. The stock trades about -0.21 of its potential returns per unit of risk. The Centaur Media is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,300  in Centaur Media on April 19, 2025 and sell it today you would earn a total of  0.00  from holding Centaur Media or generate 0.0% return on investment over 90 days.

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

Catalyst Media Group  vs.  Centaur Media

Catalyst Media Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Media Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Catalyst Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Centaur Media

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Centaur Media are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Centaur Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catalyst Media and Centaur Media

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

The idea behind Catalyst Media Group and Centaur Media 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.