Correlation Between EVS Broadcast and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and CATLIN GROUP 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 EVS Broadcast and CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVS Broadcast Equipment and CATLIN GROUP , you can compare the effects of market volatilities on EVS Broadcast and CATLIN GROUP 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 EVS Broadcast with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and CATLIN GROUP.
Diversification Opportunities for EVS Broadcast and CATLIN GROUP
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between EVS and CATLIN is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and EVS Broadcast 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 EVS Broadcast Equipment are associated (or correlated) with CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and CATLIN GROUP go up and down completely randomly.
Pair Corralation between EVS Broadcast and CATLIN GROUP
Assuming the 90 days trading horizon EVS Broadcast Equipment is expected to generate 6.33 times more return on investment than CATLIN GROUP. However, EVS Broadcast is 6.33 times more volatile than CATLIN GROUP . It trades about 0.35 of its potential returns per unit of risk. CATLIN GROUP is currently generating about -0.21 per unit of risk. If you would invest 2,735 in EVS Broadcast Equipment on September 13, 2024 and sell it today you would earn a total of 305.00 from holding EVS Broadcast Equipment or generate 11.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. CATLIN GROUP
Performance |
| Timeline |
| EVS Broadcast Equipment |
| CATLIN GROUP |
EVS Broadcast and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and CATLIN GROUP
The main advantage of trading using opposite EVS Broadcast and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, CATLIN GROUP 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP's long position.| EVS Broadcast vs. Induction Healthcare Group | EVS Broadcast vs. Universal Health Services | EVS Broadcast vs. Zoom Video Communications | EVS Broadcast vs. Vitec Software Group |
| CATLIN GROUP vs. Pfeiffer Vacuum Technology | CATLIN GROUP vs. Hilton Food Group | CATLIN GROUP vs. Sabien Technology Group | CATLIN GROUP vs. Spotify Technology SA |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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