Correlation Between Catalyst/lyons Tactical and Bondbloxx ETF

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

By analyzing existing cross correlation between Catalystlyons Tactical Allocation and Bondbloxx ETF Trust, you can compare the effects of market volatilities on Catalyst/lyons Tactical and Bondbloxx ETF 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/lyons Tactical with a short position of Bondbloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/lyons Tactical and Bondbloxx ETF.

Diversification Opportunities for Catalyst/lyons Tactical and Bondbloxx ETF

0.42

Correlation Coefficient

Catalyst/lyons Tactical  Bondbloxx ETF

Very weak diversification

The 3 months correlation between Catalyst/lyons and Bondbloxx is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Catalystlyons Tactical Allocat and Bondbloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bondbloxx ETF Trust and Catalyst/lyons Tactical 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 Catalystlyons Tactical Allocation are associated (or correlated) with Bondbloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bondbloxx ETF Trust has no effect on the direction of Catalyst/lyons Tactical i.e., Catalyst/lyons Tactical and Bondbloxx ETF go up and down completely randomly.

Pair Corralation between Catalyst/lyons Tactical and Bondbloxx ETF

Assuming the 90 days horizon Catalystlyons Tactical Allocation is expected to under-perform the Bondbloxx ETF. But the mutual fund apears to be less risky and, when comparing its historical volatility, Catalystlyons Tactical Allocation is 1.17 times less risky than Bondbloxx ETF. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Bondbloxx ETF Trust is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  4,171  in Bondbloxx ETF Trust on December 2, 2024 and sell it today you would lose (64.00) from holding Bondbloxx ETF Trust or give up 1.53% of portfolio value over 90 days.

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

Catalystlyons Tactical Allocat  vs.  Bondbloxx ETF Trust

Catalyst/lyons Tactical

Risk-Adjusted Performance

Very Weak

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

Bondbloxx ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Catalyst/lyons Tactical and Bondbloxx ETF

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

The idea behind Catalystlyons Tactical Allocation and Bondbloxx ETF Trust 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.