Correlation Between Catalyst/millburn and Ontrack Core

Can any of the company-specific risk be diversified away by investing in both Catalyst/millburn and Ontrack Core 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 Ontrack Core 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 Ontrack E Fund, you can compare the effects of market volatilities on Catalyst/millburn and Ontrack Core 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 Ontrack Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Ontrack Core.

Diversification Opportunities for Catalyst/millburn and Ontrack Core

-0.3

Correlation Coefficient

Catalyst/millburn  Ontrack Core

Very good diversification

The 3 months correlation between Catalyst/millburn and Ontrack is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Ontrack E Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontrack E Fund 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 Ontrack Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontrack E Fund has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Ontrack Core go up and down completely randomly.

Pair Corralation between Catalyst/millburn and Ontrack Core

Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to under-perform the Ontrack Core. In addition to that, Catalyst/millburn is 6.9 times more volatile than Ontrack E Fund. It trades about -0.05 of its total potential returns per unit of risk. Ontrack E Fund is currently generating about -0.02 per unit of volatility. If you would invest  5,255  in Ontrack E Fund on December 26, 2024 and sell it today you would lose (5.00) from holding Ontrack E Fund or give up 0.1% of portfolio value over 90 days.

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

Catalystmillburn Hedge Strateg  vs.  Ontrack E Fund

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 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.

Ontrack E Fund

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Catalyst/millburn and Ontrack Core

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

The idea behind Catalystmillburn Hedge Strategy and Ontrack E Fund 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..