Correlation Between Commodities Strategy and Catalystlyons Tactical

Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Catalystlyons 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 Commodities Strategy and Catalystlyons Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Commodities Strategy Fund and Catalystlyons Tactical Allocation, you can compare the effects of market volatilities on Commodities Strategy and Catalystlyons 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 Commodities Strategy with a short position of Catalystlyons Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Catalystlyons Tactical.

Diversification Opportunities for Commodities Strategy and Catalystlyons Tactical

0.33

Correlation Coefficient

Commodities Strategy  Catalystlyons Tactical

Weak diversification

The 3 months correlation between Commodities and Catalystlyons is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Catalystlyons Tactical Allocat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystlyons Tactical and Commodities Strategy 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 Commodities Strategy Fund are associated (or correlated) with Catalystlyons Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystlyons Tactical has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Catalystlyons Tactical go up and down completely randomly.

Pair Corralation between Commodities Strategy and Catalystlyons Tactical

Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 1.39 times more return on investment than Catalystlyons Tactical. However, Commodities Strategy is 1.39 times more volatile than Catalystlyons Tactical Allocation. It trades about 0.08 of its potential returns per unit of risk. Catalystlyons Tactical Allocation is currently generating about 0.1 per unit of risk. If you would invest  2,836  in Commodities Strategy Fund on September 13, 2024 and sell it today you would earn a total of  142.00  from holding Commodities Strategy Fund or generate 5.01% return on investment over 90 days.

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

Commodities Strategy Fund  vs.  Catalystlyons Tactical Allocat

Commodities Strategy

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Commodities Strategy Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Commodities Strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystlyons Tactical

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystlyons Tactical Allocation are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Catalystlyons 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 Commodities Strategy and Catalystlyons Tactical

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

The idea behind Commodities Strategy Fund and Catalystlyons Tactical Allocation 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.