Correlation Between Catalyst/millburn and Large Cap
Can any of the company-specific risk be diversified away by investing in both Catalyst/millburn and Large Cap 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 Large Cap 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 Large Cap Growth Profund, you can compare the effects of market volatilities on Catalyst/millburn and Large Cap 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Large Cap.
Diversification Opportunities for Catalyst/millburn and Large Cap
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst/millburn and Large is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Large Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Growth 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Growth has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Large Cap go up and down completely randomly.
Pair Corralation between Catalyst/millburn and Large Cap
Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to generate 0.43 times more return on investment than Large Cap. However, Catalystmillburn Hedge Strategy is 2.32 times less risky than Large Cap. It trades about 0.28 of its potential returns per unit of risk. Large Cap Growth Profund is currently generating about -0.17 per unit of risk. If you would invest 3,902 in Catalystmillburn Hedge Strategy on October 17, 2024 and sell it today you would earn a total of 122.00 from holding Catalystmillburn Hedge Strategy or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Large Cap Growth Profund
Performance |
| Timeline |
| Catalystmillburn Hedge |
| Large Cap Growth |
Catalyst/millburn and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/millburn and Large Cap
The main advantage of trading using opposite Catalyst/millburn and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/millburn position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| Catalyst/millburn vs. Ips Strategic Capital | Catalyst/millburn vs. Tax Managed Large Cap | Catalyst/millburn vs. Volumetric Fund Volumetric | Catalyst/millburn vs. Kirr Marbach Partners |
| Large Cap vs. Catalystmillburn Hedge Strategy | Large Cap vs. Dow 2x Strategy | Large Cap vs. Franklin Emerging Market | Large Cap vs. Ashmore Emerging Markets |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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