Correlation Between Catalyst/millburn and Balanced Fund
Can any of the company-specific risk be diversified away by investing in both Catalyst/millburn and Balanced Fund 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 Balanced Fund 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 Balanced Fund Investor, you can compare the effects of market volatilities on Catalyst/millburn and Balanced Fund 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 Balanced Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Balanced Fund.
Diversification Opportunities for Catalyst/millburn and Balanced Fund
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalyst/millburn and Balanced is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Balanced Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Fund Investor 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 Balanced Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Fund Investor has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Balanced Fund go up and down completely randomly.
Pair Corralation between Catalyst/millburn and Balanced Fund
Assuming the 90 days horizon Catalyst/millburn is expected to generate 4.73 times less return on investment than Balanced Fund. In addition to that, Catalyst/millburn is 1.3 times more volatile than Balanced Fund Investor. It trades about 0.02 of its total potential returns per unit of risk. Balanced Fund Investor is currently generating about 0.12 per unit of volatility. If you would invest 1,867 in Balanced Fund Investor on August 29, 2024 and sell it today you would earn a total of 149.00 from holding Balanced Fund Investor or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Balanced Fund Investor
Performance |
| Timeline |
| Catalystmillburn Hedge |
| Balanced Fund Investor |
Catalyst/millburn and Balanced Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst/millburn and Balanced Fund
The main advantage of trading using opposite Catalyst/millburn and Balanced Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/millburn position performs unexpectedly, Balanced Fund 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 Balanced Fund will offset losses from the drop in Balanced Fund's long position.| Catalyst/millburn vs. Balanced Fund Investor | Catalyst/millburn vs. Rbc Microcap Value | Catalyst/millburn vs. Volumetric Fund Volumetric | Catalyst/millburn vs. Scharf Global Opportunity |
| Balanced Fund vs. Select Fund Investor | Balanced Fund vs. Heritage Fund Investor | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. Growth Fund Investor |
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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