Correlation Between Eic Value and Catalyst/millburn

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

By analyzing existing cross correlation between Eic Value Fund and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Eic Value 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 Eic Value with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Catalyst/millburn.

Diversification Opportunities for Eic Value and Catalyst/millburn

0.76

Correlation Coefficient

Eic Value  Catalyst/millburn

Poor diversification

The 3 months correlation between Eic and Catalyst/millburn is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Eic Value 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 Eic Value Fund 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 Eic Value i.e., Eic Value and Catalyst/millburn go up and down completely randomly.

Pair Corralation between Eic Value and Catalyst/millburn

Assuming the 90 days horizon Eic Value Fund is expected to under-perform the Catalyst/millburn. But the mutual fund apears to be less risky and, when comparing its historical volatility, Eic Value Fund is 1.19 times less risky than Catalyst/millburn. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Catalystmillburn Hedge Strategy is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  4,049  in Catalystmillburn Hedge Strategy on October 11, 2024 and sell it today you would lose (87.00) from holding Catalystmillburn Hedge Strategy or give up 2.15% of portfolio value over 90 days.

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

Eic Value Fund  vs.  Catalystmillburn Hedge Strateg

Eic Value Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Catalystmillburn Hedge

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmillburn Hedge Strategy are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Catalyst/millburn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eic Value and Catalyst/millburn

The main advantage of trading using opposite Eic Value and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value 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.

The idea behind Eic Value Fund 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.