Correlation Between Us Equity and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Us Equity 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 Us Equity and Catalyst/millburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Equity Growth and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Us Equity 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 Us Equity with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Equity and Catalyst/millburn.
Diversification Opportunities for Us Equity and Catalyst/millburn
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BGGKX and Catalyst/millburn is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Equity Growth and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Us Equity 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 The Equity Growth 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 Us Equity i.e., Us Equity and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Us Equity and Catalyst/millburn
Assuming the 90 days horizon The Equity Growth is expected to generate 2.24 times more return on investment than Catalyst/millburn. However, Us Equity is 2.24 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.07 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.04 per unit of risk. If you would invest 1,693 in The Equity Growth on October 28, 2024 and sell it today you would earn a total of 1,154 from holding The Equity Growth or generate 68.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Equity Growth vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Equity Growth |
| Catalystmillburn Hedge |
Us Equity and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Equity and Catalyst/millburn
The main advantage of trading using opposite Us Equity and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Equity 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.| Us Equity vs. Small Pany Growth | Us Equity vs. The Hartford Growth | Us Equity vs. Gamco International Growth | Us Equity vs. Crafword Dividend Growth |
| Catalyst/millburn vs. Hartford Moderate Allocation | Catalyst/millburn vs. T Rowe Price | Catalyst/millburn vs. Balanced Allocation Fund | Catalyst/millburn vs. Pnc Balanced Allocation |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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