Correlation Between Rational Strategic and Catalyst/cifc Floating

Can any of the company-specific risk be diversified away by investing in both Rational Strategic and Catalyst/cifc Floating 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 Rational Strategic and Catalyst/cifc Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rational Strategic Allocation and Catalystcifc Floating Rate, you can compare the effects of market volatilities on Rational Strategic and Catalyst/cifc Floating 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 Rational Strategic with a short position of Catalyst/cifc Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rational Strategic and Catalyst/cifc Floating.

Diversification Opportunities for Rational Strategic and Catalyst/cifc Floating

0.82

Correlation Coefficient

Rational Strategic  Catalyst/cifc Floating

Very poor diversification

The 3 months correlation between Rational and Catalyst/cifc is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Rational Strategic Allocation and Catalystcifc Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst/cifc Floating and Rational Strategic 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 Rational Strategic Allocation are associated (or correlated) with Catalyst/cifc Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst/cifc Floating has no effect on the direction of Rational Strategic i.e., Rational Strategic and Catalyst/cifc Floating go up and down completely randomly.

Pair Corralation between Rational Strategic and Catalyst/cifc Floating

Assuming the 90 days horizon Rational Strategic Allocation is expected to generate 9.08 times more return on investment than Catalyst/cifc Floating. However, Rational Strategic is 9.08 times more volatile than Catalystcifc Floating Rate. It trades about 0.25 of its potential returns per unit of risk. Catalystcifc Floating Rate is currently generating about 0.09 per unit of risk. If you would invest  783.00  in Rational Strategic Allocation on July 16, 2025 and sell it today you would earn a total of  148.00  from holding Rational Strategic Allocation or generate 18.9% return on investment over 90 days.

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

Rational Strategic Allocation  vs.  Catalystcifc Floating Rate

Rational Strategic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Rational Strategic Allocation are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Rational Strategic showed solid returns over the last few months and may actually be approaching a breakup point.

Catalyst/cifc Floating

Risk-Adjusted Performance

Mild

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

Pair Trading with Rational Strategic and Catalyst/cifc Floating

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

The idea behind Rational Strategic Allocation and Catalystcifc Floating Rate 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.