Correlation Between Catalyst/smh High and Short Real
Can any of the company-specific risk be diversified away by investing in both Catalyst/smh High and Short Real 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 Short Real 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 Short Real Estate, you can compare the effects of market volatilities on Catalyst/smh High and Short Real 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 Short Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/smh High and Short Real.
Diversification Opportunities for Catalyst/smh High and Short Real
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalyst/smh and Short is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Short Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Real Estate 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 Short Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Real Estate has no effect on the direction of Catalyst/smh High i.e., Catalyst/smh High and Short Real go up and down completely randomly.
Pair Corralation between Catalyst/smh High and Short Real
Assuming the 90 days horizon Catalystsmh High Income is expected to generate 0.24 times more return on investment than Short Real. However, Catalystsmh High Income is 4.21 times less risky than Short Real. It trades about 0.19 of its potential returns per unit of risk. Short Real Estate is currently generating about -0.12 per unit of risk. If you would invest 370.00 in Catalystsmh High Income on November 2, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystsmh High Income vs. Short Real Estate
Performance |
| Timeline |
| Catalystsmh High Income |
| Short Real Estate |
Catalyst/smh High and Short Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/smh High and Short Real
The main advantage of trading using opposite Catalyst/smh High and Short Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/smh High position performs unexpectedly, Short Real 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 Short Real will offset losses from the drop in Short Real's long position.| Catalyst/smh High vs. Dws Global Macro | Catalyst/smh High vs. Alliancebernstein Global Highome | Catalyst/smh High vs. Ms Global Fixed | Catalyst/smh High vs. Ab Global Bond |
| Short Real vs. Nuveen Strategic Municipal | Short Real vs. Gamco Global Telecommunications | Short Real vs. Aig Government Money | Short Real vs. Inverse Government Long |
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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