Correlation Between Hunter Small and Catalyst/millburn

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

By analyzing existing cross correlation between Hunter Small Cap and Catalystmillburn Dynamic Commodity, you can compare the effects of market volatilities on Hunter Small 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 Hunter Small with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunter Small and Catalyst/millburn.

Diversification Opportunities for Hunter Small and Catalyst/millburn

0.31

Correlation Coefficient

Hunter Small  Catalyst/millburn

Weak diversification

The 3 months correlation between Hunter and Catalyst/millburn is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Small Cap and Catalystmillburn Dynamic Commo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Dyn and Hunter Small 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 Hunter Small Cap 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 Dyn has no effect on the direction of Hunter Small i.e., Hunter Small and Catalyst/millburn go up and down completely randomly.

Pair Corralation between Hunter Small and Catalyst/millburn

Assuming the 90 days horizon Hunter Small Cap is expected to under-perform the Catalyst/millburn. But the mutual fund apears to be less risky and, when comparing its historical volatility, Hunter Small Cap is 1.27 times less risky than Catalyst/millburn. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Catalystmillburn Dynamic Commodity is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  955.00  in Catalystmillburn Dynamic Commodity on October 9, 2024 and sell it today you would lose (61.00) from holding Catalystmillburn Dynamic Commodity or give up 6.39% of portfolio value over 90 days.

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

Hunter Small Cap  vs.  Catalystmillburn Dynamic Commo

Hunter Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Catalystmillburn Dyn

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hunter Small and Catalyst/millburn

The main advantage of trading using opposite Hunter Small and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunter Small 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 Hunter Small Cap and Catalystmillburn Dynamic Commodity 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.