Correlation Between Flow Traders and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Flow Traders 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 Flow Traders and CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders NV and CATLIN GROUP , you can compare the effects of market volatilities on Flow Traders 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 Flow Traders with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and CATLIN GROUP.
Diversification Opportunities for Flow Traders and CATLIN GROUP
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flow and CATLIN is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and Flow Traders 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 Flow Traders NV 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 Flow Traders i.e., Flow Traders and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Flow Traders and CATLIN GROUP
Assuming the 90 days trading horizon Flow Traders NV is expected to generate 2.29 times more return on investment than CATLIN GROUP. However, Flow Traders is 2.29 times more volatile than CATLIN GROUP . It trades about 0.29 of its potential returns per unit of risk. CATLIN GROUP is currently generating about -0.25 per unit of risk. If you would invest 2,159 in Flow Traders NV on November 1, 2024 and sell it today you would earn a total of 247.00 from holding Flow Traders NV or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Traders NV vs. CATLIN GROUP
Performance |
| Timeline |
| Flow Traders NV |
| CATLIN GROUP |
Flow Traders and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and CATLIN GROUP
The main advantage of trading using opposite Flow Traders and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders 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.| Flow Traders vs. Norwegian Air Shuttle | Flow Traders vs. Polar Capital Technology | Flow Traders vs. Raytheon Technologies Corp | Flow Traders vs. Virgin Wines UK |
| CATLIN GROUP vs. Evolution Gaming Group | CATLIN GROUP vs. Bisichi Mining PLC | CATLIN GROUP vs. Empire Metals Limited | CATLIN GROUP vs. GreenX Metals |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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