Correlation Between Altegris Futures and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both Altegris Futures and Catalystmillburn 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 Altegris Futures and Catalystmillburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altegris Futures Evolution and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Altegris Futures and Catalystmillburn 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 Altegris Futures with a short position of Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altegris Futures and Catalystmillburn.
Diversification Opportunities for Altegris Futures and Catalystmillburn
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Altegris and Catalystmillburn is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Altegris Futures Evolution and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Altegris Futures 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 Altegris Futures Evolution are associated (or correlated) with Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Altegris Futures i.e., Altegris Futures and Catalystmillburn go up and down completely randomly.
Pair Corralation between Altegris Futures and Catalystmillburn
Assuming the 90 days horizon Altegris Futures Evolution is expected to under-perform the Catalystmillburn. But the mutual fund apears to be less risky and, when comparing its historical volatility, Altegris Futures Evolution is 1.04 times less risky than Catalystmillburn. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Catalystmillburn Hedge Strategy is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,922 in Catalystmillburn Hedge Strategy on August 31, 2024 and sell it today you would earn a total of 110.00 from holding Catalystmillburn Hedge Strategy or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altegris Futures Evolution vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Altegris Futures Evo |
| Catalystmillburn Hedge |
Altegris Futures and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altegris Futures and Catalystmillburn
The main advantage of trading using opposite Altegris Futures and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altegris Futures position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn's long position.| Altegris Futures vs. Ab Small Cap | Altegris Futures vs. Baird Smallmid Cap | Altegris Futures vs. Touchstone Small Cap | Altegris Futures vs. Artisan Small Cap |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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