Correlation Between Ab Select and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Ab Select 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 Ab Select and Catalyst/millburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Equity and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Ab Select 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 Ab Select with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Catalyst/millburn.
Diversification Opportunities for Ab Select and Catalyst/millburn
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between AUUIX and Catalyst/millburn is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Ab Select 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 Ab Select Equity 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 Ab Select i.e., Ab Select and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Ab Select and Catalyst/millburn
Assuming the 90 days horizon Ab Select is expected to generate 1.34 times less return on investment than Catalyst/millburn. In addition to that, Ab Select is 1.35 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.11 of its total potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.2 per unit of volatility. If you would invest 3,918 in Catalystmillburn Hedge Strategy on October 25, 2024 and sell it today you would earn a total of 83.00 from holding Catalystmillburn Hedge Strategy or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Ab Select Equity |
| Catalystmillburn Hedge |
Ab Select and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Catalyst/millburn
The main advantage of trading using opposite Ab Select and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select 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.| Ab Select vs. Hennessy Large Cap | Ab Select vs. Prudential Financial Services | Ab Select vs. Davis Financial Fund | Ab Select vs. T Rowe Price |
| Catalyst/millburn vs. Heartland Value Plus | Catalyst/millburn vs. William Blair Small | Catalyst/millburn vs. Mutual Of America | Catalyst/millburn vs. American Century Etf |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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