Correlation Between Commonwealth Global and Catalyst Hedged
Can any of the company-specific risk be diversified away by investing in both Commonwealth Global and Catalyst Hedged 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 Commonwealth Global and Catalyst Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Global Fund and Catalyst Hedged Modity, you can compare the effects of market volatilities on Commonwealth Global and Catalyst Hedged 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 Commonwealth Global with a short position of Catalyst Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Global and Catalyst Hedged.
Diversification Opportunities for Commonwealth Global and Catalyst Hedged
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Commonwealth and Catalyst is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Global Fund and Catalyst Hedged Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Hedged Modity and Commonwealth Global 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 Commonwealth Global Fund are associated (or correlated) with Catalyst Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Hedged Modity has no effect on the direction of Commonwealth Global i.e., Commonwealth Global and Catalyst Hedged go up and down completely randomly.
Pair Corralation between Commonwealth Global and Catalyst Hedged
Assuming the 90 days horizon Commonwealth Global Fund is expected to generate 0.9 times more return on investment than Catalyst Hedged. However, Commonwealth Global Fund is 1.11 times less risky than Catalyst Hedged. It trades about 0.27 of its potential returns per unit of risk. Catalyst Hedged Modity is currently generating about 0.01 per unit of risk. If you would invest 2,090 in Commonwealth Global Fund on September 4, 2024 and sell it today you would earn a total of 82.00 from holding Commonwealth Global Fund or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Commonwealth Global Fund vs. Catalyst Hedged Modity
Performance |
| Timeline |
| Commonwealth Global |
| Catalyst Hedged Modity |
Commonwealth Global and Catalyst Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Global and Catalyst Hedged
The main advantage of trading using opposite Commonwealth Global and Catalyst Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Global position performs unexpectedly, Catalyst Hedged 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 Hedged will offset losses from the drop in Catalyst Hedged's long position.| Commonwealth Global vs. Commonwealth Real Estate | Commonwealth Global vs. Buffalo Growth Fund | Commonwealth Global vs. Aquagold International | Commonwealth Global vs. Morningstar Unconstrained Allocation |
| Catalyst Hedged vs. Materials Portfolio Fidelity | Catalyst Hedged vs. Western Asset Municipal | Catalyst Hedged vs. Iaadx | Catalyst Hedged vs. Volumetric Fund Volumetric |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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