Correlation Between Catalystsmh High and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Catalystsmh High and Catalyst/millburn 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 Catalystsmh High and Catalyst/millburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Catalystsmh High and Catalyst/millburn 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 Catalystsmh High with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystsmh High and Catalyst/millburn.
Diversification Opportunities for Catalystsmh High and Catalyst/millburn
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalystsmh and Catalyst/millburn is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Catalystsmh 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 Catalyst/millburn. 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 Catalystsmh High i.e., Catalystsmh High and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Catalystsmh High and Catalyst/millburn
Assuming the 90 days horizon Catalystsmh High Income is expected to generate 0.38 times more return on investment than Catalyst/millburn. However, Catalystsmh High Income is 2.6 times less risky than Catalyst/millburn. It trades about 0.21 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.04 per unit of risk. If you would invest 352.00 in Catalystsmh High Income on September 3, 2024 and sell it today you would earn a total of 25.00 from holding Catalystsmh High Income or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystsmh High Income vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Catalystsmh High Income |
| Catalystmillburn Hedge |
Catalystsmh High and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalystsmh High and Catalyst/millburn
The main advantage of trading using opposite Catalystsmh High and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystsmh High position performs unexpectedly, Catalyst/millburn 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/millburn will offset losses from the drop in Catalyst/millburn's long position.| Catalystsmh High vs. Franklin Real Estate | Catalystsmh High vs. Dunham Real Estate | Catalystsmh High vs. Great West Real Estate | Catalystsmh High vs. Prudential Real Estate |
| Catalyst/millburn vs. Blackrock Exchange Portfolio | Catalyst/millburn vs. Janus Investment | Catalyst/millburn vs. Wells Fargo Funds | Catalyst/millburn vs. John Hancock Money |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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