Correlation Between Catalyst/millburn and Tfa Tactical

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

Diversification Opportunities for Catalyst/millburn and Tfa Tactical

-0.53

Correlation Coefficient

Catalyst/millburn  Tfa Tactical

Excellent diversification

The 3 months correlation between Catalyst/millburn and Tfa is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Tfa Tactical Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tfa Tactical Income 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 Tfa Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tfa Tactical Income has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Tfa Tactical go up and down completely randomly.

Pair Corralation between Catalyst/millburn and Tfa Tactical

Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to generate 2.15 times more return on investment than Tfa Tactical. However, Catalyst/millburn is 2.15 times more volatile than Tfa Tactical Income. It trades about 0.05 of its potential returns per unit of risk. Tfa Tactical Income is currently generating about 0.0 per unit of risk. If you would invest  3,433  in Catalystmillburn Hedge Strategy on September 3, 2024 and sell it today you would earn a total of  603.00  from holding Catalystmillburn Hedge Strategy or generate 17.56% 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.  Tfa Tactical Income

Catalystmillburn Hedge

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmillburn Hedge Strategy are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Catalyst/millburn may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tfa Tactical Income

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tfa Tactical Income are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Tfa Tactical 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 Tfa Tactical

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

The idea behind Catalystmillburn Hedge Strategy and Tfa Tactical Income 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.