Correlation Between Catalyst/millburn and Pace Large
Can any of the company-specific risk be diversified away by investing in both Catalyst/millburn and Pace Large 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 Pace Large 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 Pace Large Growth, you can compare the effects of market volatilities on Catalyst/millburn and Pace Large 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 Pace Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Pace Large.
Diversification Opportunities for Catalyst/millburn and Pace Large
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalyst/millburn and Pace is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Pace Large Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Large 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 Pace Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Large Growth has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Pace Large go up and down completely randomly.
Pair Corralation between Catalyst/millburn and Pace Large
Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to generate 0.21 times more return on investment than Pace Large. However, Catalystmillburn Hedge Strategy is 4.7 times less risky than Pace Large. It trades about -0.03 of its potential returns per unit of risk. Pace Large Growth is currently generating about -0.25 per unit of risk. If you would invest 3,948 in Catalystmillburn Hedge Strategy on October 11, 2024 and sell it today you would lose (13.00) from holding Catalystmillburn Hedge Strategy or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Pace Large Growth
Performance |
| Timeline |
| Catalystmillburn Hedge |
| Pace Large Growth |
Catalyst/millburn and Pace Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/millburn and Pace Large
The main advantage of trading using opposite Catalyst/millburn and Pace Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/millburn position performs unexpectedly, Pace Large 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 Pace Large will offset losses from the drop in Pace Large's long position.| Catalyst/millburn vs. Northern Small Cap | Catalyst/millburn vs. Guggenheim Diversified Income | Catalyst/millburn vs. Small Cap Stock | Catalyst/millburn vs. Jhancock Diversified Macro |
| Pace Large vs. Catalystmillburn Hedge Strategy | Pace Large vs. Nasdaq 100 2x Strategy | Pace Large vs. Wcm Focused Emerging | Pace Large vs. Balanced Strategy 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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