Correlation Between Campbell Systematic and Gateway Fund

Can any of the company-specific risk be diversified away by investing in both Campbell Systematic and Gateway Fund 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 Campbell Systematic and Gateway Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Campbell Systematic Macro and Gateway Fund Class, you can compare the effects of market volatilities on Campbell Systematic and Gateway Fund 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 Campbell Systematic with a short position of Gateway Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campbell Systematic and Gateway Fund.

Diversification Opportunities for Campbell Systematic and Gateway Fund

0.45

Correlation Coefficient

Campbell Systematic  Gateway Fund

Very weak diversification

The 3 months correlation between Campbell and Gateway is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Campbell Systematic Macro and Gateway Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Fund Class and Campbell Systematic 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 Campbell Systematic Macro are associated (or correlated) with Gateway Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Fund Class has no effect on the direction of Campbell Systematic i.e., Campbell Systematic and Gateway Fund go up and down completely randomly.

Pair Corralation between Campbell Systematic and Gateway Fund

Assuming the 90 days horizon Campbell Systematic Macro is expected to generate 1.02 times more return on investment than Gateway Fund. However, Campbell Systematic is 1.02 times more volatile than Gateway Fund Class. It trades about 0.16 of its potential returns per unit of risk. Gateway Fund Class is currently generating about 0.11 per unit of risk. If you would invest  949.00  in Campbell Systematic Macro on October 26, 2024 and sell it today you would earn a total of  52.00  from holding Campbell Systematic Macro or generate 5.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Campbell Systematic Macro  vs.  Gateway Fund Class

Campbell Systematic Macro

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Campbell Systematic Macro are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Campbell Systematic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gateway Fund Class

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gateway Fund Class are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gateway Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Campbell Systematic and Gateway Fund

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

The idea behind Campbell Systematic Macro and Gateway Fund Class 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.