Correlation Between Catalyst/millburn and Nasdaq-100(r)
Can any of the company-specific risk be diversified away by investing in both Catalyst/millburn and Nasdaq-100(r) 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 Nasdaq-100(r) 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 Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Catalyst/millburn and Nasdaq-100(r) 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 Nasdaq-100(r). Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Nasdaq-100(r).
Diversification Opportunities for Catalyst/millburn and Nasdaq-100(r)
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Catalyst/millburn and Nasdaq-100(r) is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x 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 Nasdaq-100(r). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Nasdaq-100(r) go up and down completely randomly.
Pair Corralation between Catalyst/millburn and Nasdaq-100(r)
Assuming the 90 days horizon Catalyst/millburn is expected to generate 1.36 times less return on investment than Nasdaq-100(r). But when comparing it to its historical volatility, Catalystmillburn Hedge Strategy is 4.51 times less risky than Nasdaq-100(r). It trades about 0.12 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 37,927 in Nasdaq 100 2x Strategy on November 1, 2024 and sell it today you would earn a total of 1,920 from holding Nasdaq 100 2x Strategy or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Catalystmillburn Hedge |
| Nasdaq 100 2x |
Catalyst/millburn and Nasdaq-100(r) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/millburn and Nasdaq-100(r)
The main advantage of trading using opposite Catalyst/millburn and Nasdaq-100(r) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/millburn position performs unexpectedly, Nasdaq-100(r) 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 Nasdaq-100(r) will offset losses from the drop in Nasdaq-100(r)'s long position.| Catalyst/millburn vs. Multisector Bond Sma | Catalyst/millburn vs. Doubleline Total Return | Catalyst/millburn vs. Ab Global Bond | Catalyst/millburn vs. Ab Bond Inflation |
| Nasdaq-100(r) vs. Goldman Sachs Strategic | Nasdaq-100(r) vs. Global Gold Fund | Nasdaq-100(r) vs. Fidelity Advisor Gold | Nasdaq-100(r) vs. James Balanced Golden |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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