Correlation Between CATCo Reinsurance and MG Plc
Can any of the company-specific risk be diversified away by investing in both CATCo Reinsurance and MG 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 MG 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 MG Plc, you can compare the effects of market volatilities on CATCo Reinsurance and MG 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 MG Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATCo Reinsurance and MG Plc.
Diversification Opportunities for CATCo Reinsurance and MG Plc
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CATCo and MNG is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CATCo Reinsurance Opportunitie and MG Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG 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 MG Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Plc has no effect on the direction of CATCo Reinsurance i.e., CATCo Reinsurance and MG Plc go up and down completely randomly.
Pair Corralation between CATCo Reinsurance and MG Plc
Assuming the 90 days trading horizon CATCo Reinsurance Opportunities is expected to generate 10.28 times more return on investment than MG Plc. However, CATCo Reinsurance is 10.28 times more volatile than MG Plc. It trades about 0.22 of its potential returns per unit of risk. MG Plc is currently generating about 0.01 per unit of risk. If you would invest 2,500 in CATCo Reinsurance Opportunities on August 28, 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 | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CATCo Reinsurance Opportunitie vs. MG Plc
Performance |
| Timeline |
| CATCo Reinsurance |
| MG Plc |
CATCo Reinsurance and MG Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATCo Reinsurance and MG Plc
The main advantage of trading using opposite CATCo Reinsurance and MG Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATCo Reinsurance position performs unexpectedly, MG 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 MG Plc will offset losses from the drop in MG Plc's long position.| CATCo Reinsurance vs. Samsung Electronics Co | CATCo Reinsurance vs. Samsung Electronics Co | CATCo Reinsurance vs. Hyundai Motor | CATCo Reinsurance vs. Toyota Motor Corp |
| MG Plc vs. Eastman Chemical Co | MG Plc vs. Empire Metals Limited | MG Plc vs. Air Products Chemicals | MG Plc vs. Norwegian Air Shuttle |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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