Correlation Between Inverse Nasdaq and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Inverse Nasdaq 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 Inverse Nasdaq and Catalyst/millburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Nasdaq 100 Strategy and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Inverse Nasdaq 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 Inverse Nasdaq with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Nasdaq and Catalyst/millburn.
Diversification Opportunities for Inverse Nasdaq and Catalyst/millburn
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inverse and Catalyst/millburn is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Nasdaq 100 Strategy and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Inverse Nasdaq 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 Inverse Nasdaq 100 Strategy 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 Inverse Nasdaq i.e., Inverse Nasdaq and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Inverse Nasdaq and Catalyst/millburn
Assuming the 90 days horizon Inverse Nasdaq 100 Strategy is expected to under-perform the Catalyst/millburn. In addition to that, Inverse Nasdaq is 2.17 times more volatile than Catalystmillburn Hedge Strategy. It trades about -0.06 of its total potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.21 per unit of volatility. If you would invest 3,697 in Catalystmillburn Hedge Strategy on October 18, 2024 and sell it today you would earn a total of 327.00 from holding Catalystmillburn Hedge Strategy or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse Nasdaq 100 Strategy vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Inverse Nasdaq 100 |
| Catalystmillburn Hedge |
Inverse Nasdaq and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Nasdaq and Catalyst/millburn
The main advantage of trading using opposite Inverse Nasdaq and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Nasdaq 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.| Inverse Nasdaq vs. Rbb Fund | Inverse Nasdaq vs. Semiconductor Ultrasector Profund | Inverse Nasdaq vs. Arrow Managed Futures | Inverse Nasdaq vs. Eic Value Fund |
| Catalyst/millburn vs. Ips Strategic Capital | Catalyst/millburn vs. Tax Managed Large Cap | Catalyst/millburn vs. Volumetric Fund Volumetric | Catalyst/millburn vs. Kirr Marbach Partners |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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