Correlation Between Catalystmillburn and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Catalystmillburn and Arrow Managed 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 Arrow Managed 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 Arrow Managed Futures, you can compare the effects of market volatilities on Catalystmillburn and Arrow Managed 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 Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystmillburn and Arrow Managed.
Diversification Opportunities for Catalystmillburn and Arrow Managed
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catalystmillburn and Arrow is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures 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 Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Catalystmillburn i.e., Catalystmillburn and Arrow Managed go up and down completely randomly.
Pair Corralation between Catalystmillburn and Arrow Managed
Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to generate 0.5 times more return on investment than Arrow Managed. However, Catalystmillburn Hedge Strategy is 2.01 times less risky than Arrow Managed. It trades about 0.06 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about -0.06 per unit of risk. If you would invest 3,771 in Catalystmillburn Hedge Strategy on September 1, 2024 and sell it today you would earn a total of 265.00 from holding Catalystmillburn Hedge Strategy or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Arrow Managed Futures
Performance |
| Timeline |
| Catalystmillburn Hedge |
| Arrow Managed Futures |
Catalystmillburn and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalystmillburn and Arrow Managed
The main advantage of trading using opposite Catalystmillburn and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystmillburn position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Catalystmillburn vs. Jhancock Real Estate | Catalystmillburn vs. Msif Real Estate | Catalystmillburn vs. Pender Real Estate | Catalystmillburn vs. Franklin Real Estate |
| Arrow Managed vs. Arrow Dwa Tactical | Arrow Managed vs. Arrow Dwa Tactical | Arrow Managed vs. Vanguard 500 Index | Arrow Managed vs. Allspring Global Dividend |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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