Correlation Between Catalyst Hedged and Commodityrealreturn
Can any of the company-specific risk be diversified away by investing in both Catalyst Hedged and Commodityrealreturn 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 Hedged and Commodityrealreturn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Hedged Modity and Commodityrealreturn Strategy Fund, you can compare the effects of market volatilities on Catalyst Hedged and Commodityrealreturn 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 Hedged with a short position of Commodityrealreturn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Hedged and Commodityrealreturn.
Diversification Opportunities for Catalyst Hedged and Commodityrealreturn
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Catalyst and Commodityrealreturn is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Hedged Modity and Commodityrealreturn Strategy F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodityrealreturn and Catalyst Hedged 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 Hedged Modity are associated (or correlated) with Commodityrealreturn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodityrealreturn has no effect on the direction of Catalyst Hedged i.e., Catalyst Hedged and Commodityrealreturn go up and down completely randomly.
Pair Corralation between Catalyst Hedged and Commodityrealreturn
Assuming the 90 days horizon Catalyst Hedged Modity is expected to generate 1.13 times more return on investment than Commodityrealreturn. However, Catalyst Hedged is 1.13 times more volatile than Commodityrealreturn Strategy Fund. It trades about -0.01 of its potential returns per unit of risk. Commodityrealreturn Strategy Fund is currently generating about -0.01 per unit of risk. If you would invest 928.00 in Catalyst Hedged Modity on September 1, 2024 and sell it today you would lose (16.00) from holding Catalyst Hedged Modity or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Hedged Modity vs. Commodityrealreturn Strategy F
Performance |
| Timeline |
| Catalyst Hedged Modity |
| Commodityrealreturn |
Catalyst Hedged and Commodityrealreturn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Hedged and Commodityrealreturn
The main advantage of trading using opposite Catalyst Hedged and Commodityrealreturn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Hedged position performs unexpectedly, Commodityrealreturn 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 Commodityrealreturn will offset losses from the drop in Commodityrealreturn's long position.| Catalyst Hedged vs. Aqr Diversified Arbitrage | Catalyst Hedged vs. Jhancock Diversified Macro | Catalyst Hedged vs. Tax Managed Mid Small | Catalyst Hedged vs. Delaware Limited Term Diversified |
| Commodityrealreturn vs. Real Return Fund | Commodityrealreturn vs. All Asset Fund | Commodityrealreturn vs. Perkins Mid Cap | Commodityrealreturn vs. Columbia Modity Strategy |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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