Correlation Between Arrow Managed and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Arrow Managed 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 Arrow Managed and Catalyst/millburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Arrow Managed 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 Arrow Managed with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Catalyst/millburn.
Diversification Opportunities for Arrow Managed and Catalyst/millburn
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arrow and Catalyst/millburn is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Arrow Managed 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 Arrow Managed Futures 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 Arrow Managed i.e., Arrow Managed and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Arrow Managed and Catalyst/millburn
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 2.06 times more return on investment than Catalyst/millburn. However, Arrow Managed is 2.06 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.27 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.27 per unit of risk. If you would invest 524.00 in Arrow Managed Futures on September 3, 2024 and sell it today you would earn a total of 34.00 from holding Arrow Managed Futures or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Arrow Managed Futures |
| Catalystmillburn Hedge |
Arrow Managed and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Catalyst/millburn
The main advantage of trading using opposite Arrow Managed and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed 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.| Arrow Managed vs. Transamerica Funds | Arrow Managed vs. T Rowe Price | Arrow Managed vs. Cs 607 Tax | Arrow Managed vs. Intermediate Term Tax Free Bond |
| Catalyst/millburn vs. Blackrock Exchange Portfolio | Catalyst/millburn vs. Janus Investment | Catalyst/millburn vs. Wells Fargo Funds | Catalyst/millburn vs. John Hancock Money |
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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