Correlation Between Balanced Allocation and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both Balanced Allocation 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 Balanced Allocation and Catalystmillburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Allocation Fund and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Balanced Allocation 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 Balanced Allocation with a short position of Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Allocation and Catalystmillburn.
Diversification Opportunities for Balanced Allocation and Catalystmillburn
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Balanced and Catalystmillburn is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Allocation Fund and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Balanced Allocation 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 Balanced Allocation Fund 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 Balanced Allocation i.e., Balanced Allocation and Catalystmillburn go up and down completely randomly.
Pair Corralation between Balanced Allocation and Catalystmillburn
Assuming the 90 days horizon Balanced Allocation Fund is expected to under-perform the Catalystmillburn. But the mutual fund apears to be less risky and, when comparing its historical volatility, Balanced Allocation Fund is 1.24 times less risky than Catalystmillburn. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Catalystmillburn Hedge Strategy is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,918 in Catalystmillburn Hedge Strategy on November 6, 2024 and sell it today you would lose (2.00) from holding Catalystmillburn Hedge Strategy or give up 0.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Allocation Fund vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Balanced Allocation |
| Catalystmillburn Hedge |
Balanced Allocation and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Allocation and Catalystmillburn
The main advantage of trading using opposite Balanced Allocation and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Allocation 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.| Balanced Allocation vs. Growth Strategy Fund | Balanced Allocation vs. Commodities Strategy Fund | Balanced Allocation vs. Siit Emerging Markets | Balanced Allocation vs. Investec Emerging Markets |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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