Correlation Between Catalystmillburn and Altegrisaaca Opportunistic

Can any of the company-specific risk be diversified away by investing in both Catalystmillburn and Altegrisaaca Opportunistic 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 Catalystmillburn and Altegrisaaca Opportunistic 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 Altegrisaaca Opportunistic Real, you can compare the effects of market volatilities on Catalystmillburn and Altegrisaaca Opportunistic 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 Catalystmillburn with a short position of Altegrisaaca Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystmillburn and Altegrisaaca Opportunistic.

Diversification Opportunities for Catalystmillburn and Altegrisaaca Opportunistic

0.07

Correlation Coefficient

Catalystmillburn  Altegrisaaca Opportunistic

Significant diversification

The 3 months correlation between Catalystmillburn and Altegrisaaca is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Altegrisaaca Opportunistic Rea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegrisaaca Opportunistic and Catalystmillburn 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 Altegrisaaca Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegrisaaca Opportunistic has no effect on the direction of Catalystmillburn i.e., Catalystmillburn and Altegrisaaca Opportunistic go up and down completely randomly.

Pair Corralation between Catalystmillburn and Altegrisaaca Opportunistic

Assuming the 90 days horizon Catalystmillburn is expected to generate 3.4 times less return on investment than Altegrisaaca Opportunistic. But when comparing it to its historical volatility, Catalystmillburn Hedge Strategy is 1.84 times less risky than Altegrisaaca Opportunistic. It trades about 0.04 of its potential returns per unit of risk. Altegrisaaca Opportunistic Real is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,004  in Altegrisaaca Opportunistic Real on September 17, 2024 and sell it today you would earn a total of  292.00  from holding Altegrisaaca Opportunistic Real or generate 29.08% return on investment over 90 days.

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

Catalystmillburn Hedge Strateg  vs.  Altegrisaaca Opportunistic Rea

Catalystmillburn Hedge

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmillburn Hedge Strategy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Catalystmillburn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Altegrisaaca Opportunistic

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Catalystmillburn and Altegrisaaca Opportunistic

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

The idea behind Catalystmillburn Hedge Strategy and Altegrisaaca Opportunistic Real 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.