Correlation Between Catalystmillburn and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Catalystmillburn and Scharf Global 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 Scharf Global 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 Scharf Global Opportunity, you can compare the effects of market volatilities on Catalystmillburn and Scharf Global 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 Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystmillburn and Scharf Global.
Diversification Opportunities for Catalystmillburn and Scharf Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Catalystmillburn and Scharf is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity 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 Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Catalystmillburn i.e., Catalystmillburn and Scharf Global go up and down completely randomly.
Pair Corralation between Catalystmillburn and Scharf Global
Assuming the 90 days horizon Catalystmillburn is expected to generate 1.51 times less return on investment than Scharf Global. In addition to that, Catalystmillburn is 1.07 times more volatile than Scharf Global Opportunity. It trades about 0.06 of its total potential returns per unit of risk. Scharf Global Opportunity is currently generating about 0.09 per unit of volatility. If you would invest 3,448 in Scharf Global Opportunity on September 1, 2024 and sell it today you would earn a total of 381.00 from holding Scharf Global Opportunity or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Scharf Global Opportunity
Performance |
| Timeline |
| Catalystmillburn Hedge |
| Scharf Global Opportunity |
Catalystmillburn and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalystmillburn and Scharf Global
The main advantage of trading using opposite Catalystmillburn and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystmillburn position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global's long position.| Catalystmillburn vs. Jhancock Real Estate | Catalystmillburn vs. Msif Real Estate | Catalystmillburn vs. Pender Real Estate | Catalystmillburn vs. Franklin Real Estate |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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