Correlation Between Catalyst Enhanced and Catalyst Hedged
Can any of the company-specific risk be diversified away by investing in both Catalyst Enhanced 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 Catalyst Enhanced and Catalyst Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Enhanced Income and Catalyst Hedged Modity, you can compare the effects of market volatilities on Catalyst Enhanced 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 Catalyst Enhanced with a short position of Catalyst Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Enhanced and Catalyst Hedged.
Diversification Opportunities for Catalyst Enhanced and Catalyst Hedged
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalyst and Catalyst is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Enhanced Income 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 Catalyst Enhanced 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 Enhanced Income 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 Catalyst Enhanced i.e., Catalyst Enhanced and Catalyst Hedged go up and down completely randomly.
Pair Corralation between Catalyst Enhanced and Catalyst Hedged
Assuming the 90 days horizon Catalyst Enhanced Income is expected to under-perform the Catalyst Hedged. But the mutual fund apears to be less risky and, when comparing its historical volatility, Catalyst Enhanced Income is 2.98 times less risky than Catalyst Hedged. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Catalyst Hedged Modity is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 905.00 in Catalyst Hedged Modity on September 5, 2024 and sell it today you would earn a total of 5.00 from holding Catalyst Hedged Modity or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Catalyst Enhanced Income vs. Catalyst Hedged Modity
Performance |
| Timeline |
| Catalyst Enhanced Income |
| Catalyst Hedged Modity |
Catalyst Enhanced and Catalyst Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Enhanced and Catalyst Hedged
The main advantage of trading using opposite Catalyst Enhanced and Catalyst Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Enhanced 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.| Catalyst Enhanced vs. Catalystsmh High Income | Catalyst Enhanced vs. Catalystsmh High Income | Catalyst Enhanced vs. Catalystsmh High Income | Catalyst Enhanced vs. Catalyst Mlp Infrastructure |
| Catalyst Hedged vs. Nasdaq 100 2x Strategy | Catalyst Hedged vs. Angel Oak Multi Strategy | Catalyst Hedged vs. Ep Emerging Markets | Catalyst Hedged vs. Legg Mason Partners |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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