Correlation Between Catalyst/millburn and Catalystexceed Defined

Can any of the company-specific risk be diversified away by investing in both Catalyst/millburn and Catalystexceed Defined 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/millburn and Catalystexceed Defined 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 Catalystexceed Defined Shield, you can compare the effects of market volatilities on Catalyst/millburn and Catalystexceed Defined 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/millburn with a short position of Catalystexceed Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Catalystexceed Defined.

Diversification Opportunities for Catalyst/millburn and Catalystexceed Defined

0.67

Correlation Coefficient

Catalyst/millburn  Catalystexceed Defined

Poor diversification

The 3 months correlation between Catalyst/millburn and Catalystexceed is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Catalystexceed Defined Shield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystexceed Defined and Catalyst/millburn 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 Catalystexceed Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystexceed Defined has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Catalystexceed Defined go up and down completely randomly.

Pair Corralation between Catalyst/millburn and Catalystexceed Defined

Assuming the 90 days horizon Catalyst/millburn is expected to generate 1.94 times less return on investment than Catalystexceed Defined. In addition to that, Catalyst/millburn is 1.25 times more volatile than Catalystexceed Defined Shield. It trades about 0.08 of its total potential returns per unit of risk. Catalystexceed Defined Shield is currently generating about 0.21 per unit of volatility. If you would invest  1,017  in Catalystexceed Defined Shield on May 16, 2025 and sell it today you would earn a total of  49.00  from holding Catalystexceed Defined Shield or generate 4.82% return on investment over 90 days.

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

Catalystmillburn Hedge Strateg  vs.  Catalystexceed Defined Shield

Catalystmillburn Hedge

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmillburn Hedge Strategy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Catalyst/millburn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystexceed Defined

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystexceed Defined Shield are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Catalystexceed Defined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Catalyst/millburn and Catalystexceed Defined

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

The idea behind Catalystmillburn Hedge Strategy and Catalystexceed Defined Shield 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.