Correlation Between Voya High and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Voya 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 Voya 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 Voya High Yield and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Voya 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 Voya High with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Catalyst/millburn.
Diversification Opportunities for Voya High and Catalyst/millburn
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voya and Catalyst/millburn is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Voya 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 Voya High Yield 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 Voya High i.e., Voya High and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Voya High and Catalyst/millburn
Assuming the 90 days horizon Voya High is expected to generate 1.95 times less return on investment than Catalyst/millburn. But when comparing it to its historical volatility, Voya High Yield is 2.68 times less risky than Catalyst/millburn. It trades about 0.15 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,694 in Catalystmillburn Hedge Strategy on October 24, 2024 and sell it today you would earn a total of 133.00 from holding Catalystmillburn Hedge Strategy or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Voya High Yield |
| Catalystmillburn Hedge |
Voya High and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Catalyst/millburn
The main advantage of trading using opposite Voya High and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya 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.| Voya High vs. Blackrock Health Sciences | Voya High vs. Hartford Healthcare Hls | Voya High vs. Deutsche Health And | Voya High vs. Alphacentric Lifesci Healthcare |
| Catalyst/millburn vs. Precious Metals And | Catalyst/millburn vs. James Balanced Golden | Catalyst/millburn vs. Gamco Global Gold | Catalyst/millburn vs. Global Gold Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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