Correlation Between Catalyst/smh High and Cref Money
Can any of the company-specific risk be diversified away by investing in both Catalyst/smh High and Cref Money 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/smh High and Cref Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystsmh High Income and Cref Money Market, you can compare the effects of market volatilities on Catalyst/smh High and Cref Money 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/smh High with a short position of Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/smh High and Cref Money.
Diversification Opportunities for Catalyst/smh High and Cref Money
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst/smh and Cref is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market and Catalyst/smh High 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 Catalystsmh High Income are associated (or correlated) with Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Catalyst/smh High i.e., Catalyst/smh High and Cref Money go up and down completely randomly.
Pair Corralation between Catalyst/smh High and Cref Money
Assuming the 90 days horizon Catalystsmh High Income is expected to generate 18.35 times more return on investment than Cref Money. However, Catalyst/smh High is 18.35 times more volatile than Cref Money Market. It trades about 0.19 of its potential returns per unit of risk. Cref Money Market is currently generating about 1.02 per unit of risk. If you would invest 369.00 in Catalystsmh High Income on October 23, 2024 and sell it today you would earn a total of 4.00 from holding Catalystsmh High Income or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Catalystsmh High Income vs. Cref Money Market
Performance |
| Timeline |
| Catalystsmh High Income |
| Cref Money Market |
Catalyst/smh High and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/smh High and Cref Money
The main advantage of trading using opposite Catalyst/smh High and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/smh High position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.| Catalyst/smh High vs. Barings Emerging Markets | Catalyst/smh High vs. Angel Oak Multi Strategy | Catalyst/smh High vs. Alphacentric Symmetry Strategy | Catalyst/smh High vs. Eagle Mlp Strategy |
| Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard 500 Index | Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard Total Stock |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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