Correlation Between Catalyst/millburn and Rational Real
Can any of the company-specific risk be diversified away by investing in both Catalyst/millburn and Rational 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/millburn and Rational Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystmillburn Hedge Strategy and Rational Real Strategies, you can compare the effects of market volatilities on Catalyst/millburn and Rational 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/millburn with a short position of Rational Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Rational Real.
Diversification Opportunities for Catalyst/millburn and Rational Real
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalyst/millburn and Rational is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Rational Real Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rational Real Strategies and Catalyst/millburn 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 Catalystmillburn Hedge Strategy are associated (or correlated) with Rational Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rational Real Strategies has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Rational Real go up and down completely randomly.
Pair Corralation between Catalyst/millburn and Rational Real
Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to generate 8.43 times more return on investment than Rational Real. However, Catalyst/millburn is 8.43 times more volatile than Rational Real Strategies. It trades about 0.19 of its potential returns per unit of risk. Rational Real Strategies is currently generating about 0.18 per unit of risk. If you would invest 3,895 in Catalystmillburn Hedge Strategy on August 26, 2024 and sell it today you would earn a total of 95.00 from holding Catalystmillburn Hedge Strategy or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Rational Real Strategies
Performance |
| Timeline |
| Catalystmillburn Hedge |
| Rational Real Strategies |
Catalyst/millburn and Rational Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/millburn and Rational Real
The main advantage of trading using opposite Catalyst/millburn and Rational Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/millburn position performs unexpectedly, Rational 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 Rational Real will offset losses from the drop in Rational Real's long position.| Catalyst/millburn vs. Massmutual Premier Funds | Catalyst/millburn vs. Transamerica Funds | Catalyst/millburn vs. Dreyfus Institutional Reserves | Catalyst/millburn vs. Rbc Funds Trust |
| Rational Real vs. T Rowe Price | Rational Real vs. Transamerica Large Cap | Rational Real vs. T Rowe Price | Rational Real vs. T Rowe Price |
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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