Correlation Between Catalystlyons Tactical and Global Gold
Can any of the company-specific risk be diversified away by investing in both Catalystlyons Tactical and Global Gold 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 Catalystlyons Tactical and Global Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystlyons Tactical Allocation and Global Gold Fund, you can compare the effects of market volatilities on Catalystlyons Tactical and Global Gold 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 Catalystlyons Tactical with a short position of Global Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystlyons Tactical and Global Gold.
Diversification Opportunities for Catalystlyons Tactical and Global Gold
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalystlyons and Global is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Catalystlyons Tactical Allocat and Global Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gold Fund and Catalystlyons Tactical 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 Catalystlyons Tactical Allocation are associated (or correlated) with Global Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gold Fund has no effect on the direction of Catalystlyons Tactical i.e., Catalystlyons Tactical and Global Gold go up and down completely randomly.
Pair Corralation between Catalystlyons Tactical and Global Gold
Assuming the 90 days horizon Catalystlyons Tactical is expected to generate 3.26 times less return on investment than Global Gold. But when comparing it to its historical volatility, Catalystlyons Tactical Allocation is 2.41 times less risky than Global Gold. It trades about 0.05 of its potential returns per unit of risk. Global Gold Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,042 in Global Gold Fund on September 14, 2024 and sell it today you would earn a total of 291.00 from holding Global Gold Fund or generate 27.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystlyons Tactical Allocat vs. Global Gold Fund
Performance |
| Timeline |
| Catalystlyons Tactical |
| Global Gold Fund |
Catalystlyons Tactical and Global Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalystlyons Tactical and Global Gold
The main advantage of trading using opposite Catalystlyons Tactical and Global Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystlyons Tactical position performs unexpectedly, Global Gold 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 Global Gold will offset losses from the drop in Global Gold's long position.The idea behind Catalystlyons Tactical Allocation and Global Gold Fund 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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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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