Correlation Between Catalystmillburn and Grant Park
Can any of the company-specific risk be diversified away by investing in both Catalystmillburn and Grant Park 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 Grant Park 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 Grant Park Multi, you can compare the effects of market volatilities on Catalystmillburn and Grant Park 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 Grant Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystmillburn and Grant Park.
Diversification Opportunities for Catalystmillburn and Grant Park
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catalystmillburn and Grant is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Grant Park Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grant Park Multi 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 Grant Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grant Park Multi has no effect on the direction of Catalystmillburn i.e., Catalystmillburn and Grant Park go up and down completely randomly.
Pair Corralation between Catalystmillburn and Grant Park
Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to under-perform the Grant Park. In addition to that, Catalystmillburn is 2.83 times more volatile than Grant Park Multi. It trades about -0.11 of its total potential returns per unit of risk. Grant Park Multi is currently generating about 0.2 per unit of volatility. If you would invest 1,064 in Grant Park Multi on September 17, 2024 and sell it today you would earn a total of 12.00 from holding Grant Park Multi or generate 1.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Grant Park Multi
Performance |
Timeline |
Catalystmillburn Hedge |
Grant Park Multi |
Catalystmillburn and Grant Park Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catalystmillburn and Grant Park
The main advantage of trading using opposite Catalystmillburn and Grant Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystmillburn position performs unexpectedly, Grant Park 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 Grant Park will offset losses from the drop in Grant Park's long position.Catalystmillburn vs. Franklin Growth Opportunities | Catalystmillburn vs. Qs Moderate Growth | Catalystmillburn vs. Eip Growth And | Catalystmillburn vs. Champlain Mid Cap |
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Check out your portfolio center.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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