Correlation Between Catalystmillburn and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Catalystmillburn 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 Catalystmillburn and Catalyst/millburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Catalystmillburn 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 Catalystmillburn with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystmillburn and Catalyst/millburn.
Diversification Opportunities for Catalystmillburn and Catalyst/millburn
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Catalystmillburn and Catalyst/millburn is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Catalystmillburn 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 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 Catalystmillburn i.e., Catalystmillburn and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Catalystmillburn and Catalyst/millburn
Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to generate 1.01 times more return on investment than Catalyst/millburn. However, Catalystmillburn is 1.01 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.37 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.37 per unit of risk. If you would invest 3,889 in Catalystmillburn Hedge Strategy on October 22, 2024 and sell it today you would earn a total of 146.00 from holding Catalystmillburn Hedge Strategy or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Catalystmillburn Hedge |
| Catalystmillburn Hedge |
Catalystmillburn and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalystmillburn and Catalyst/millburn
The main advantage of trading using opposite Catalystmillburn and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystmillburn 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.| Catalystmillburn vs. Virtus Seix Government | Catalystmillburn vs. Schwab Government Money | Catalystmillburn vs. Intermediate Government Bond | Catalystmillburn vs. Short Term Government Fund |
| Catalyst/millburn vs. Dodge Cox Stock | Catalyst/millburn vs. Avantis Large Cap | Catalyst/millburn vs. Americafirst Large Cap | Catalyst/millburn vs. Fisher Large Cap |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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