Correlation Between CATCo Reinsurance and GlaxoSmithKline PLC
Can any of the company-specific risk be diversified away by investing in both CATCo Reinsurance and GlaxoSmithKline 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 GlaxoSmithKline PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATCo Reinsurance Opps and GlaxoSmithKline PLC, you can compare the effects of market volatilities on CATCo Reinsurance and GlaxoSmithKline 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 GlaxoSmithKline PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATCo Reinsurance and GlaxoSmithKline PLC.
Diversification Opportunities for CATCo Reinsurance and GlaxoSmithKline PLC
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CATCo and GlaxoSmithKline is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CATCo Reinsurance Opps and GlaxoSmithKline PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlaxoSmithKline 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 Opps are associated (or correlated) with GlaxoSmithKline PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlaxoSmithKline PLC has no effect on the direction of CATCo Reinsurance i.e., CATCo Reinsurance and GlaxoSmithKline PLC go up and down completely randomly.
Pair Corralation between CATCo Reinsurance and GlaxoSmithKline PLC
If you would invest 22,000 in CATCo Reinsurance Opps on August 31, 2024 and sell it today you would earn a total of 0.00 from holding CATCo Reinsurance Opps or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATCo Reinsurance Opps vs. GlaxoSmithKline PLC
Performance |
| Timeline |
| CATCo Reinsurance Opps |
| GlaxoSmithKline PLC |
CATCo Reinsurance and GlaxoSmithKline PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATCo Reinsurance and GlaxoSmithKline PLC
The main advantage of trading using opposite CATCo Reinsurance and GlaxoSmithKline PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATCo Reinsurance position performs unexpectedly, GlaxoSmithKline 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 GlaxoSmithKline PLC will offset losses from the drop in GlaxoSmithKline 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 |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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