Correlation Between Catalyst/millburn and Anchor Tactical

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

Diversification Opportunities for Catalyst/millburn and Anchor Tactical

0.35

Correlation Coefficient

Catalyst/millburn  Anchor Tactical

Weak diversification

The 3 months correlation between Catalyst/millburn and Anchor is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Anchor Tactical Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anchor Tactical Equity 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 Anchor Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anchor Tactical Equity has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Anchor Tactical go up and down completely randomly.

Pair Corralation between Catalyst/millburn and Anchor Tactical

Assuming the 90 days horizon Catalyst/millburn is expected to generate 20.08 times less return on investment than Anchor Tactical. But when comparing it to its historical volatility, Catalystmillburn Hedge Strategy is 1.52 times less risky than Anchor Tactical. It trades about 0.01 of its potential returns per unit of risk. Anchor Tactical Equity is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,501  in Anchor Tactical Equity on July 3, 2025 and sell it today you would earn a total of  75.00  from holding Anchor Tactical Equity or generate 5.0% return on investment over 90 days.

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

Catalystmillburn Hedge Strateg  vs.  Anchor Tactical Equity

Catalystmillburn Hedge

Risk-Adjusted Performance

Weakest

Over the last 90 days Catalystmillburn Hedge Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Catalyst/millburn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Anchor Tactical Equity

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Anchor Tactical Equity are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Anchor Tactical 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 Anchor Tactical

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

The idea behind Catalystmillburn Hedge Strategy and Anchor Tactical Equity 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.