Correlation Between Balanced Allocation and Catalystmap Global

Can any of the company-specific risk be diversified away by investing in both Balanced Allocation and Catalystmap Global 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 Balanced Allocation and Catalystmap Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Balanced Allocation and Catalystmap Global

0.98

Correlation Coefficient

Balanced Allocation  Catalystmap Global

Almost no diversification

The 3 months correlation between Balanced and Catalystmap is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Allocation Fund and Catalystmap Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmap Global and Balanced Allocation 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 Balanced Allocation Fund are associated (or correlated) with Catalystmap Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmap Global has no effect on the direction of Balanced Allocation i.e., Balanced Allocation and Catalystmap Global go up and down completely randomly.

Pair Corralation between Balanced Allocation and Catalystmap Global

Assuming the 90 days horizon Balanced Allocation Fund is expected to generate 1.19 times more return on investment than Catalystmap Global. However, Balanced Allocation is 1.19 times more volatile than Catalystmap Global Balanced. It trades about 0.29 of its potential returns per unit of risk. Catalystmap Global Balanced is currently generating about 0.34 per unit of risk. If you would invest  1,165  in Balanced Allocation Fund on April 30, 2025 and sell it today you would earn a total of  73.00  from holding Balanced Allocation Fund or generate 6.27% return on investment over 90 days.

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

Balanced Allocation Fund  vs.  Catalystmap Global Balanced

Balanced Allocation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Balanced Allocation Fund are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Balanced Allocation may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Catalystmap Global

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmap Global Balanced are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Catalystmap Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Balanced Allocation and Catalystmap Global

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

The idea behind Balanced Allocation Fund and Catalystmap Global Balanced 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.