Correlation Between CATCo Reinsurance and Mindflair Plc
Can any of the company-specific risk be diversified away by investing in both CATCo Reinsurance and Mindflair Plc 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 CATCo Reinsurance and Mindflair Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATCo Reinsurance Opportunities and Mindflair Plc, you can compare the effects of market volatilities on CATCo Reinsurance and Mindflair Plc 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 CATCo Reinsurance with a short position of Mindflair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATCo Reinsurance and Mindflair Plc.
Diversification Opportunities for CATCo Reinsurance and Mindflair Plc
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CATCo and Mindflair is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding CATCo Reinsurance Opportunitie and Mindflair Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindflair Plc and CATCo Reinsurance 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 CATCo Reinsurance Opportunities are associated (or correlated) with Mindflair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindflair Plc has no effect on the direction of CATCo Reinsurance i.e., CATCo Reinsurance and Mindflair Plc go up and down completely randomly.
Pair Corralation between CATCo Reinsurance and Mindflair Plc
Assuming the 90 days trading horizon CATCo Reinsurance Opportunities is expected to generate 7.19 times more return on investment than Mindflair Plc. However, CATCo Reinsurance is 7.19 times more volatile than Mindflair Plc. It trades about 0.21 of its potential returns per unit of risk. Mindflair Plc is currently generating about 0.08 per unit of risk. If you would invest 2,500 in CATCo Reinsurance Opportunities on August 24, 2024 and sell it today you would earn a total of 1,250 from holding CATCo Reinsurance Opportunities or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATCo Reinsurance Opportunitie vs. Mindflair Plc
Performance |
| Timeline |
| CATCo Reinsurance |
| Mindflair Plc |
CATCo Reinsurance and Mindflair Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATCo Reinsurance and Mindflair Plc
The main advantage of trading using opposite CATCo Reinsurance and Mindflair Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATCo Reinsurance position performs unexpectedly, Mindflair Plc 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 Mindflair Plc will offset losses from the drop in Mindflair Plc's long position.| CATCo Reinsurance vs. Home Depot | CATCo Reinsurance vs. River and Mercantile | CATCo Reinsurance vs. Chrysalis Investments | CATCo Reinsurance vs. Sherborne Investors Guernsey |
| Mindflair Plc vs. CATCo Reinsurance Opportunities | Mindflair Plc vs. Fair Oaks Income | Mindflair Plc vs. Legal General Group | Mindflair Plc vs. Intermediate Capital Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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