Correlation Between Catalystmillburn and Pgim Wadhwani

Can any of the company-specific risk be diversified away by investing in both Catalystmillburn and Pgim Wadhwani 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 Pgim Wadhwani 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 Pgim Wadhwani Systematic, you can compare the effects of market volatilities on Catalystmillburn and Pgim Wadhwani 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 Pgim Wadhwani. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystmillburn and Pgim Wadhwani.

Diversification Opportunities for Catalystmillburn and Pgim Wadhwani

-0.11

Correlation Coefficient

Catalystmillburn  Pgim Wadhwani

Good diversification

The 3 months correlation between Catalystmillburn and Pgim is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Pgim Wadhwani Systematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Wadhwani Systematic 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 Pgim Wadhwani. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Wadhwani Systematic has no effect on the direction of Catalystmillburn i.e., Catalystmillburn and Pgim Wadhwani go up and down completely randomly.

Pair Corralation between Catalystmillburn and Pgim Wadhwani

If you would invest  3,633  in Catalystmillburn Hedge Strategy on August 31, 2024 and sell it today you would earn a total of  233.00  from holding Catalystmillburn Hedge Strategy or generate 6.41% return on investment over 90 days.

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

Catalystmillburn Hedge Strateg  vs.  Pgim Wadhwani Systematic

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 strong fundamental indicators, Catalystmillburn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pgim Wadhwani Systematic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pgim Wadhwani Systematic has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Pgim Wadhwani 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 Pgim Wadhwani

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

The idea behind Catalystmillburn Hedge Strategy and Pgim Wadhwani Systematic 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.