Correlation Between Catalyst/aspect Enhanced and Abs Insights

Can any of the company-specific risk be diversified away by investing in both Catalyst/aspect Enhanced and Abs Insights 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/aspect Enhanced and Abs Insights into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalystaspect Enhanced Multi Asset and Abs Insights Emerging, you can compare the effects of market volatilities on Catalyst/aspect Enhanced and Abs Insights 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/aspect Enhanced with a short position of Abs Insights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/aspect Enhanced and Abs Insights.

Diversification Opportunities for Catalyst/aspect Enhanced and Abs Insights

0.83

Correlation Coefficient

Catalyst/aspect Enhanced  Abs Insights

Very poor diversification

The 3 months correlation between Catalyst/Aspect and Abs is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Catalystaspect Enhanced Multi and Abs Insights Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abs Insights Emerging and Catalyst/aspect Enhanced 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 Catalystaspect Enhanced Multi Asset are associated (or correlated) with Abs Insights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abs Insights Emerging has no effect on the direction of Catalyst/aspect Enhanced i.e., Catalyst/aspect Enhanced and Abs Insights go up and down completely randomly.

Pair Corralation between Catalyst/aspect Enhanced and Abs Insights

Assuming the 90 days horizon Catalyst/aspect Enhanced is expected to generate 1.46 times less return on investment than Abs Insights. But when comparing it to its historical volatility, Catalystaspect Enhanced Multi Asset is 1.08 times less risky than Abs Insights. It trades about 0.28 of its potential returns per unit of risk. Abs Insights Emerging is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  1,010  in Abs Insights Emerging on April 25, 2025 and sell it today you would earn a total of  165.00  from holding Abs Insights Emerging or generate 16.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Catalystaspect Enhanced Multi   vs.  Abs Insights Emerging

Catalyst/aspect Enhanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystaspect Enhanced Multi Asset are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Catalyst/aspect Enhanced may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Abs Insights Emerging

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Abs Insights Emerging are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Abs Insights showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catalyst/aspect Enhanced and Abs Insights

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

The idea behind Catalystaspect Enhanced Multi Asset and Abs Insights Emerging 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.