Correlation Between Stringer Growth and Catalyst/millburn

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Can any of the company-specific risk be diversified away by investing in both Stringer Growth 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 Stringer Growth and Catalyst/millburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stringer Growth Fund and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Stringer Growth 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 Stringer Growth with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stringer Growth and Catalyst/millburn.

Diversification Opportunities for Stringer Growth and Catalyst/millburn

0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between Stringer and Catalyst/millburn is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Stringer Growth Fund and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Stringer Growth 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 Stringer Growth Fund 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 Stringer Growth i.e., Stringer Growth and Catalyst/millburn go up and down completely randomly.

Pair Corralation between Stringer Growth and Catalyst/millburn

Assuming the 90 days horizon Stringer Growth Fund is expected to generate 0.76 times more return on investment than Catalyst/millburn. However, Stringer Growth Fund is 1.32 times less risky than Catalyst/millburn. It trades about 0.07 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  1,070  in Stringer Growth Fund on October 28, 2024 and sell it today you would earn a total of  207.00  from holding Stringer Growth Fund or generate 19.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Stringer Growth Fund  vs.  Catalystmillburn Hedge Strateg

 Performance 
       Timeline  
Stringer Growth 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Stringer Growth Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Stringer Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Catalystmillburn Hedge 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmillburn Hedge Strategy are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Catalyst/millburn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Stringer Growth and Catalyst/millburn Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Stringer Growth and Catalyst/millburn

The main advantage of trading using opposite Stringer Growth and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stringer Growth 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.
The idea behind Stringer Growth Fund and Catalystmillburn Hedge Strategy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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