Correlation Between Vanguard Emerging and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Vanguard Emerging 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 Vanguard Emerging and Catalyst/millburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Emerging Markets and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Vanguard Emerging 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 Vanguard Emerging with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Catalyst/millburn.
Diversification Opportunities for Vanguard Emerging and Catalyst/millburn
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Catalyst/millburn is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Vanguard Emerging 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 Vanguard Emerging Markets 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 Vanguard Emerging i.e., Vanguard Emerging and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Catalyst/millburn
Assuming the 90 days horizon Vanguard Emerging Markets is expected to generate 1.11 times more return on investment than Catalyst/millburn. However, Vanguard Emerging is 1.11 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.04 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.03 per unit of risk. If you would invest 2,404 in Vanguard Emerging Markets on January 26, 2025 and sell it today you would earn a total of 434.00 from holding Vanguard Emerging Markets or generate 18.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Catalystmillburn Hedge |
Vanguard Emerging and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Catalyst/millburn
The main advantage of trading using opposite Vanguard Emerging and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Emerging 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.| Vanguard Emerging vs. Alpine Ultra Short | Vanguard Emerging vs. John Hancock Municipal | Vanguard Emerging vs. Us Government Securities | Vanguard Emerging vs. Prudential California Muni |
| Catalyst/millburn vs. Catalystsmh High Income | Catalyst/millburn vs. Catalystsmh High Income | Catalyst/millburn vs. Catalystsmh High Income | Catalyst/millburn vs. Catalyst Mlp Infrastructure |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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