Correlation Between Catalyst/millburn and Catalyst/exceed Defined
Can any of the company-specific risk be diversified away by investing in both Catalyst/millburn and Catalyst/exceed Defined 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 Catalyst/exceed Defined 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 Catalystexceed Defined Shield, you can compare the effects of market volatilities on Catalyst/millburn and Catalyst/exceed Defined 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 Catalyst/exceed Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Catalyst/exceed Defined.
Diversification Opportunities for Catalyst/millburn and Catalyst/exceed Defined
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catalyst/millburn and Catalyst/exceed is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Catalystexceed Defined Shield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst/exceed Defined 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 Catalyst/exceed Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst/exceed Defined has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Catalyst/exceed Defined go up and down completely randomly.
Pair Corralation between Catalyst/millburn and Catalyst/exceed Defined
Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to generate 1.27 times more return on investment than Catalyst/exceed Defined. However, Catalyst/millburn is 1.27 times more volatile than Catalystexceed Defined Shield. It trades about 0.25 of its potential returns per unit of risk. Catalystexceed Defined Shield is currently generating about 0.18 per unit of risk. If you would invest 3,830 in Catalystmillburn Hedge Strategy on September 3, 2024 and sell it today you would earn a total of 206.00 from holding Catalystmillburn Hedge Strategy or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Catalystexceed Defined Shield
Performance |
| Timeline |
| Catalystmillburn Hedge |
| Catalyst/exceed Defined |
Catalyst/millburn and Catalyst/exceed Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/millburn and Catalyst/exceed Defined
The main advantage of trading using opposite Catalyst/millburn and Catalyst/exceed Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/millburn position performs unexpectedly, Catalyst/exceed Defined 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/exceed Defined will offset losses from the drop in Catalyst/exceed Defined's long position.| Catalyst/millburn vs. Balanced Fund Retail | Catalyst/millburn vs. Cutler Equity | Catalyst/millburn vs. Sarofim Equity | Catalyst/millburn vs. Artisan Select Equity |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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