Correlation Between CATCo Reinsurance and Whitbread PLC
Can any of the company-specific risk be diversified away by investing in both CATCo Reinsurance and Whitbread 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 Whitbread 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 Whitbread PLC, you can compare the effects of market volatilities on CATCo Reinsurance and Whitbread 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 Whitbread PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATCo Reinsurance and Whitbread PLC.
Diversification Opportunities for CATCo Reinsurance and Whitbread PLC
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CATCo and Whitbread is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CATCo Reinsurance Opportunitie and Whitbread PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread 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 Whitbread PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread PLC has no effect on the direction of CATCo Reinsurance i.e., CATCo Reinsurance and Whitbread PLC go up and down completely randomly.
Pair Corralation between CATCo Reinsurance and Whitbread PLC
Assuming the 90 days trading horizon CATCo Reinsurance Opportunities is expected to generate 12.66 times more return on investment than Whitbread PLC. However, CATCo Reinsurance is 12.66 times more volatile than Whitbread PLC. It trades about 0.21 of its potential returns per unit of risk. Whitbread PLC is currently generating about -0.28 per unit of risk. If you would invest 2,500 in CATCo Reinsurance Opportunities on September 1, 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 | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CATCo Reinsurance Opportunitie vs. Whitbread PLC
Performance |
| Timeline |
| CATCo Reinsurance |
| Whitbread PLC |
CATCo Reinsurance and Whitbread PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATCo Reinsurance and Whitbread PLC
The main advantage of trading using opposite CATCo Reinsurance and Whitbread PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATCo Reinsurance position performs unexpectedly, Whitbread 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 Whitbread PLC will offset losses from the drop in Whitbread PLC's long position.| CATCo Reinsurance vs. Silvercorp Metals | CATCo Reinsurance vs. Future Metals NL | CATCo Reinsurance vs. Panther Metals PLC | CATCo Reinsurance vs. Wheaton Precious Metals |
| Whitbread PLC vs. Viridian Therapeutics | Whitbread PLC vs. CVR Energy | Whitbread PLC vs. Nationwide Building Society | Whitbread PLC vs. Dollar Tree |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |