Correlation Between Catalyst/millburn and Pimco Fundamental

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

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

Diversification Opportunities for Catalyst/millburn and Pimco Fundamental

-0.58

Correlation Coefficient

Catalyst/millburn  Pimco Fundamental

Excellent diversification

The 3 months correlation between Catalyst/millburn and Pimco is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Pimco Fundamental Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Fundamental and Catalyst/millburn 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 Catalystmillburn Hedge Strategy are associated (or correlated) with Pimco Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Fundamental has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Pimco Fundamental go up and down completely randomly.

Pair Corralation between Catalyst/millburn and Pimco Fundamental

Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to under-perform the Pimco Fundamental. In addition to that, Catalyst/millburn is 1.03 times more volatile than Pimco Fundamental Advantage. It trades about -0.04 of its total potential returns per unit of risk. Pimco Fundamental Advantage is currently generating about 0.12 per unit of volatility. If you would invest  755.00  in Pimco Fundamental Advantage on December 25, 2024 and sell it today you would earn a total of  36.00  from holding Pimco Fundamental Advantage or generate 4.77% return on investment over 90 days.

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

Catalystmillburn Hedge Strateg  vs.  Pimco Fundamental Advantage

Catalystmillburn Hedge

Risk-Adjusted Performance

Very Weak

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

Pimco Fundamental

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Fundamental Advantage are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Fundamental 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/millburn and Pimco Fundamental

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

The idea behind Catalystmillburn Hedge Strategy and Pimco Fundamental Advantage 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 Stocks Directory module to find actively traded stocks across global markets.