Correlation Between Catalyst Exceed and Anchor Tactical

Can any of the company-specific risk be diversified away by investing in both Catalyst Exceed and Anchor Tactical 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 Catalyst Exceed and Anchor Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalyst Exceed Defined and Anchor Tactical Equity, you can compare the effects of market volatilities on Catalyst Exceed and Anchor Tactical 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 Catalyst Exceed with a short position of Anchor Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Exceed and Anchor Tactical.

Diversification Opportunities for Catalyst Exceed and Anchor Tactical

0.91

Correlation Coefficient

Catalyst Exceed  Anchor Tactical

Almost no diversification

The 3 months correlation between Catalyst and Anchor is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Exceed Defined and Anchor Tactical Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anchor Tactical Equity and Catalyst Exceed 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 Catalyst Exceed Defined are associated (or correlated) with Anchor Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anchor Tactical Equity has no effect on the direction of Catalyst Exceed i.e., Catalyst Exceed and Anchor Tactical go up and down completely randomly.

Pair Corralation between Catalyst Exceed and Anchor Tactical

Assuming the 90 days horizon Catalyst Exceed Defined is expected to under-perform the Anchor Tactical. In addition to that, Catalyst Exceed is 1.91 times more volatile than Anchor Tactical Equity. It trades about -0.13 of its total potential returns per unit of risk. Anchor Tactical Equity is currently generating about -0.12 per unit of volatility. If you would invest  1,461  in Anchor Tactical Equity on December 30, 2024 and sell it today you would lose (67.00) from holding Anchor Tactical Equity or give up 4.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Catalyst Exceed Defined  vs.  Anchor Tactical Equity

Catalyst Exceed Defined

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catalyst Exceed Defined has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Anchor Tactical Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Anchor Tactical Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Anchor Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Catalyst Exceed and Anchor Tactical

The main advantage of trading using opposite Catalyst Exceed and Anchor Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Exceed position performs unexpectedly, Anchor Tactical 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 Anchor Tactical will offset losses from the drop in Anchor Tactical's long position.

The idea behind Catalyst Exceed Defined and Anchor Tactical Equity 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.