Correlation Between Batm Advanced and CATCo Reinsurance
Can any of the company-specific risk be diversified away by investing in both Batm Advanced and CATCo Reinsurance 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 Batm Advanced and CATCo Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and CATCo Reinsurance Opportunities, you can compare the effects of market volatilities on Batm Advanced and CATCo Reinsurance 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 Batm Advanced with a short position of CATCo Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and CATCo Reinsurance.
Diversification Opportunities for Batm Advanced and CATCo Reinsurance
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Batm and CATCo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and CATCo Reinsurance Opportunitie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATCo Reinsurance and Batm Advanced 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 Batm Advanced Communications are associated (or correlated) with CATCo Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATCo Reinsurance has no effect on the direction of Batm Advanced i.e., Batm Advanced and CATCo Reinsurance go up and down completely randomly.
Pair Corralation between Batm Advanced and CATCo Reinsurance
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the CATCo Reinsurance. But the stock apears to be less risky and, when comparing its historical volatility, Batm Advanced Communications is 1.08 times less risky than CATCo Reinsurance. The stock trades about -0.02 of its potential returns per unit of risk. The CATCo Reinsurance Opportunities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,400 in CATCo Reinsurance Opportunities on September 3, 2024 and sell it today you would earn a total of 1,350 from holding CATCo Reinsurance Opportunities or generate 56.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Batm Advanced Communications vs. CATCo Reinsurance Opportunitie
Performance |
| Timeline |
| Batm Advanced Commun |
| CATCo Reinsurance |
Batm Advanced and CATCo Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and CATCo Reinsurance
The main advantage of trading using opposite Batm Advanced and CATCo Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, CATCo Reinsurance 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 CATCo Reinsurance will offset losses from the drop in CATCo Reinsurance's long position.| Batm Advanced vs. Ecclesiastical Insurance Office | Batm Advanced vs. Bank of Ireland | Batm Advanced vs. Erste Group Bank | Batm Advanced vs. Fortune Brands Home |
| CATCo Reinsurance vs. Team Internet Group | CATCo Reinsurance vs. Spirent Communications plc | CATCo Reinsurance vs. Batm Advanced Communications | CATCo Reinsurance vs. Flow Traders NV |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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