Correlation Between Dws Government and Catalyst/millburn

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

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

Diversification Opportunities for Dws Government and Catalyst/millburn

0.0

Correlation Coefficient

Dws Government  Catalyst/millburn

Pay attention - limited upside

The 3 months correlation between Dws and Catalyst/millburn is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dws Government Money and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Dws Government 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 Dws Government Money 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 Dws Government i.e., Dws Government and Catalyst/millburn go up and down completely randomly.

Pair Corralation between Dws Government and Catalyst/millburn

Assuming the 90 days horizon Dws Government Money is expected to under-perform the Catalyst/millburn. In addition to that, Dws Government is 5.96 times more volatile than Catalystmillburn Hedge Strategy. It trades about -0.06 of its total potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.04 per unit of volatility. If you would invest  3,385  in Catalystmillburn Hedge Strategy on October 11, 2024 and sell it today you would earn a total of  411.00  from holding Catalystmillburn Hedge Strategy or generate 12.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	53.74%
Values	Daily Returns

Dws Government Money  vs.  Catalystmillburn Hedge Strateg

Dws Government Money

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dws Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dws Government 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

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmillburn Hedge Strategy are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental 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 Dws Government and Catalyst/millburn

The main advantage of trading using opposite Dws Government and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws Government 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 Dws Government Money 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.