Correlation Between Catalyst/millburn and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Catalyst/millburn and Ishares Municipal 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/millburn and Ishares Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystmillburn Dynamic Commodity and Ishares Municipal Bond, you can compare the effects of market volatilities on Catalyst/millburn and Ishares Municipal 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/millburn with a short position of Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Ishares Municipal.
Diversification Opportunities for Catalyst/millburn and Ishares Municipal
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Catalyst/millburn and Ishares is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Dynamic Commo and Ishares Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Municipal Bond and Catalyst/millburn 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 Catalystmillburn Dynamic Commodity are associated (or correlated) with Ishares Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Municipal Bond has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Ishares Municipal go up and down completely randomly.
Pair Corralation between Catalyst/millburn and Ishares Municipal
Assuming the 90 days horizon Catalyst/millburn is expected to generate 1.37 times less return on investment than Ishares Municipal. In addition to that, Catalyst/millburn is 3.37 times more volatile than Ishares Municipal Bond. It trades about 0.01 of its total potential returns per unit of risk. Ishares Municipal Bond is currently generating about 0.07 per unit of volatility. If you would invest 1,052 in Ishares Municipal Bond on September 2, 2024 and sell it today you would earn a total of 65.00 from holding Ishares Municipal Bond or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystmillburn Dynamic Commo vs. Ishares Municipal Bond
Performance |
| Timeline |
| Catalystmillburn Dyn |
| Ishares Municipal Bond |
Catalyst/millburn and Ishares Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/millburn and Ishares Municipal
The main advantage of trading using opposite Catalyst/millburn and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/millburn position performs unexpectedly, Ishares Municipal 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 Ishares Municipal will offset losses from the drop in Ishares Municipal's long position.| Catalyst/millburn vs. Catalystsmh High Income | Catalyst/millburn vs. Catalystsmh High Income | Catalyst/millburn vs. Catalystsmh High Income | Catalyst/millburn vs. Catalyst Mlp Infrastructure |
| Ishares Municipal vs. Calvert Developed Market | Ishares Municipal vs. Siit Emerging Markets | Ishares Municipal vs. Locorr Market Trend | Ishares Municipal vs. Ab All Market |
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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