Correlation Between Catalystmap Global and Catalystlyons Tactical
Can any of the company-specific risk be diversified away by investing in both Catalystmap Global and Catalystlyons 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 Catalystmap Global and Catalystlyons Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystmap Global Balanced and Catalystlyons Tactical Allocation, you can compare the effects of market volatilities on Catalystmap Global and Catalystlyons 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 Catalystmap Global with a short position of Catalystlyons Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystmap Global and Catalystlyons Tactical.
Diversification Opportunities for Catalystmap Global and Catalystlyons Tactical
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Catalystmap and Catalystlyons is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmap Global Balanced and Catalystlyons Tactical Allocat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystlyons Tactical and Catalystmap Global 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 Catalystmap Global Balanced are associated (or correlated) with Catalystlyons Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystlyons Tactical has no effect on the direction of Catalystmap Global i.e., Catalystmap Global and Catalystlyons Tactical go up and down completely randomly.
Pair Corralation between Catalystmap Global and Catalystlyons Tactical
Assuming the 90 days horizon Catalystmap Global is expected to generate 2.05 times less return on investment than Catalystlyons Tactical. But when comparing it to its historical volatility, Catalystmap Global Balanced is 2.54 times less risky than Catalystlyons Tactical. It trades about 0.27 of its potential returns per unit of risk. Catalystlyons Tactical Allocation is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,470 in Catalystlyons Tactical Allocation on April 30, 2025 and sell it today you would earn a total of 161.00 from holding Catalystlyons Tactical Allocation or generate 10.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Catalystmap Global Balanced vs. Catalystlyons Tactical Allocat
Performance |
Timeline |
Catalystmap Global |
Catalystlyons Tactical |
Catalystmap Global and Catalystlyons Tactical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catalystmap Global and Catalystlyons Tactical
The main advantage of trading using opposite Catalystmap Global and Catalystlyons Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystmap Global position performs unexpectedly, Catalystlyons 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 Catalystlyons Tactical will offset losses from the drop in Catalystlyons Tactical's long position.Catalystmap Global vs. Great West Inflation Protected Securities | Catalystmap Global vs. Ab Bond Inflation | Catalystmap Global vs. Short Duration Inflation | Catalystmap Global vs. The Hartford Inflation |
Check out your portfolio center.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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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