Correlation Between Technology Fund and Catalyst/millburn

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

By analyzing existing cross correlation between Technology Fund Investor and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Technology Fund and Catalyst/millburn 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 Technology Fund with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology Fund and Catalyst/millburn.

Diversification Opportunities for Technology Fund and Catalyst/millburn

0.89

Correlation Coefficient

Technology Fund  Catalyst/millburn

Very poor diversification

The 3 months correlation between TECHNOLOGY and Catalyst/millburn is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Technology Fund Investor and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Technology Fund 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 Technology Fund Investor are associated (or correlated) with Catalyst/millburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Technology Fund i.e., Technology Fund and Catalyst/millburn go up and down completely randomly.

Pair Corralation between Technology Fund and Catalyst/millburn

Assuming the 90 days horizon Technology Fund Investor is expected to generate 2.03 times more return on investment than Catalyst/millburn. However, Technology Fund is 2.03 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.24 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.15 per unit of risk. If you would invest  20,652  in Technology Fund Investor on May 21, 2025 and sell it today you would earn a total of  3,044  from holding Technology Fund Investor or generate 14.74% return on investment over 90 days.

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

Technology Fund Investor  vs.  Catalystmillburn Hedge Strateg

Technology Fund Investor

Risk-Adjusted Performance

Solid

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

Catalystmillburn Hedge

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmillburn Hedge Strategy are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pair Trading with Technology Fund and Catalyst/millburn

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

The idea behind Technology Fund Investor and Catalystmillburn Hedge Strategy 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.