Correlation Between Aig Government and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Aig Government 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 Aig Government and Catalyst/millburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Aig Government 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 Aig Government with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Catalyst/millburn.
Diversification Opportunities for Aig Government and Catalyst/millburn
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aig and Catalyst/millburn is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Aig Government 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 Aig Government Money 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 Aig Government i.e., Aig Government and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Aig Government and Catalyst/millburn
Assuming the 90 days horizon Aig Government is expected to generate 10.16 times less return on investment than Catalyst/millburn. But when comparing it to its historical volatility, Aig Government Money is 3.89 times less risky than Catalyst/millburn. It trades about 0.06 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,853 in Catalystmillburn Hedge Strategy on November 1, 2024 and sell it today you would earn a total of 78.00 from holding Catalystmillburn Hedge Strategy or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Aig Government Money |
| Catalystmillburn Hedge |
Aig Government and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Catalyst/millburn
The main advantage of trading using opposite Aig Government and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government 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.| Aig Government vs. Advent Claymore Convertible | Aig Government vs. Allianzgi Convertible Income | Aig Government vs. Columbia Convertible Securities | Aig Government vs. Allianzgi Convertible Income |
| Catalyst/millburn vs. Multisector Bond Sma | Catalyst/millburn vs. Doubleline Total Return | Catalyst/millburn vs. Ab Global Bond | Catalyst/millburn vs. Ab Bond Inflation |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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