Correlation Between Commodityrealreturn and Catalyst Hedged
Can any of the company-specific risk be diversified away by investing in both Commodityrealreturn and Catalyst Hedged 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 Commodityrealreturn and Catalyst Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodityrealreturn Strategy Fund and Catalyst Hedged Modity, you can compare the effects of market volatilities on Commodityrealreturn and Catalyst Hedged 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 Commodityrealreturn with a short position of Catalyst Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodityrealreturn and Catalyst Hedged.
Diversification Opportunities for Commodityrealreturn and Catalyst Hedged
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Commodityrealreturn and Catalyst is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Commodityrealreturn Strategy F and Catalyst Hedged Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Hedged Modity and Commodityrealreturn 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 Commodityrealreturn Strategy Fund are associated (or correlated) with Catalyst Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Hedged Modity has no effect on the direction of Commodityrealreturn i.e., Commodityrealreturn and Catalyst Hedged go up and down completely randomly.
Pair Corralation between Commodityrealreturn and Catalyst Hedged
Assuming the 90 days horizon Commodityrealreturn is expected to generate 5.24 times less return on investment than Catalyst Hedged. In addition to that, Commodityrealreturn is 1.01 times more volatile than Catalyst Hedged Modity. It trades about 0.02 of its total potential returns per unit of risk. Catalyst Hedged Modity is currently generating about 0.09 per unit of volatility. If you would invest 898.00 in Catalyst Hedged Modity on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Catalyst Hedged Modity or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodityrealreturn Strategy F vs. Catalyst Hedged Modity
Performance |
| Timeline |
| Commodityrealreturn |
| Catalyst Hedged Modity |
Commodityrealreturn and Catalyst Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodityrealreturn and Catalyst Hedged
The main advantage of trading using opposite Commodityrealreturn and Catalyst Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodityrealreturn position performs unexpectedly, Catalyst Hedged 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 Hedged will offset losses from the drop in Catalyst Hedged's long position.| Commodityrealreturn vs. Real Return Fund | Commodityrealreturn vs. All Asset Fund | Commodityrealreturn vs. Perkins Mid Cap | Commodityrealreturn vs. Columbia Modity Strategy |
| Catalyst Hedged vs. Aqr Diversified Arbitrage | Catalyst Hedged vs. Jhancock Diversified Macro | Catalyst Hedged vs. Tax Managed Mid Small | Catalyst Hedged vs. Delaware Limited Term Diversified |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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