Correlation Between Global Gold and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Global Gold and Catalyst/millburn 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 Global Gold and Catalyst/millburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Global Gold and Catalyst/millburn 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 Global Gold with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Catalyst/millburn.
Diversification Opportunities for Global Gold and Catalyst/millburn
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Catalyst/millburn is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Global Gold 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 Global Gold Fund are associated (or correlated) with Catalyst/millburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Global Gold i.e., Global Gold and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Global Gold and Catalyst/millburn
Assuming the 90 days horizon Global Gold Fund is expected to generate 2.28 times more return on investment than Catalyst/millburn. However, Global Gold is 2.28 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.36 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.24 per unit of risk. If you would invest 1,186 in Global Gold Fund on October 24, 2024 and sell it today you would earn a total of 111.00 from holding Global Gold Fund or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Global Gold Fund |
| Catalystmillburn Hedge |
Global Gold and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Catalyst/millburn
The main advantage of trading using opposite Global Gold and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Catalyst/millburn 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/millburn will offset losses from the drop in Catalyst/millburn's long position.| Global Gold vs. Semiconductor Ultrasector Profund | Global Gold vs. Transamerica Asset Allocation | Global Gold vs. Morningstar Global Income | Global Gold vs. Barings Global Floating |
| Catalyst/millburn vs. Precious Metals And | Catalyst/millburn vs. James Balanced Golden | Catalyst/millburn vs. Gamco Global Gold | Catalyst/millburn vs. Global Gold Fund |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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