Correlation Between California High and Catalystmillburn

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both California High and Catalystmillburn 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 California High and Catalystmillburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on California High and Catalystmillburn 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 California High with a short position of Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High and Catalystmillburn.

Diversification Opportunities for California High and Catalystmillburn

CaliforniaCatalystmillburnDiversified AwayCaliforniaCatalystmillburnDiversified Away100%
-0.08
  Correlation Coefficient

Good diversification

The 3 months correlation between California and Catalystmillburn is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and California High 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 California High Yield Municipal are associated (or correlated) with Catalystmillburn. 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 California High i.e., California High and Catalystmillburn go up and down completely randomly.

Pair Corralation between California High and Catalystmillburn

Assuming the 90 days horizon California High is expected to generate 1.1 times less return on investment than Catalystmillburn. But when comparing it to its historical volatility, California High Yield Municipal is 2.61 times less risky than Catalystmillburn. It trades about 0.08 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,501  in Catalystmillburn Hedge Strategy on September 13, 2024 and sell it today you would earn a total of  400.00  from holding Catalystmillburn Hedge Strategy or generate 11.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

California High Yield Municipa  vs.  Catalystmillburn Hedge Strateg

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 0246
JavaScript chart by amCharts 3.21.15BCHIX MBXAX
       Timeline  
California High Yield 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days California High Yield Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, California High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec9.759.89.859.99.95
Catalystmillburn Hedge 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
Solid
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, Catalystmillburn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec37.53838.53939.540

California High and Catalystmillburn Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.78-0.53-0.28-0.07920.0035110.08780.310.560.81 12345
JavaScript chart by amCharts 3.21.15BCHIX MBXAX
       Returns  

Pair Trading with California High and Catalystmillburn

The main advantage of trading using opposite California High and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn's long position.
The idea behind California High Yield Municipal 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.
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

Other Complementary Tools

Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets


 

Trending Assets