Correlation Between Pace International and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both Pace International and Catalystmillburn 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 Pace International and Catalystmillburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Pace International and Catalystmillburn 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 Pace International with a short position of Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Catalystmillburn.
Diversification Opportunities for Pace International and Catalystmillburn
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pace and Catalystmillburn is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Pace International 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 Pace International Emerging are associated (or correlated) with Catalystmillburn. 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 Pace International i.e., Pace International and Catalystmillburn go up and down completely randomly.
Pair Corralation between Pace International and Catalystmillburn
Assuming the 90 days horizon Pace International Emerging is expected to generate 1.22 times more return on investment than Catalystmillburn. However, Pace International is 1.22 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.05 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.04 per unit of risk. If you would invest 1,211 in Pace International Emerging on September 15, 2024 and sell it today you would earn a total of 145.00 from holding Pace International Emerging or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Emerging vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Pace International |
| Catalystmillburn Hedge |
Pace International and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Catalystmillburn
The main advantage of trading using opposite Pace International and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn's long position.| Pace International vs. Pace Smallmedium Value | Pace International vs. Pace International Equity | Pace International vs. Pace International Equity | Pace International vs. Ubs Allocation Fund |
| Catalystmillburn vs. Pace International Emerging | Catalystmillburn vs. Origin Emerging Markets | Catalystmillburn vs. Shelton Emerging Markets | Catalystmillburn vs. Franklin Emerging Market |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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