Correlation Between CAT Strategic and Glen Eagle
Can any of the company-specific risk be diversified away by investing in both CAT Strategic and Glen Eagle 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 CAT Strategic and Glen Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAT Strategic Metals and Glen Eagle Resources, you can compare the effects of market volatilities on CAT Strategic and Glen Eagle 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 CAT Strategic with a short position of Glen Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAT Strategic and Glen Eagle.
Diversification Opportunities for CAT Strategic and Glen Eagle
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAT and Glen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CAT Strategic Metals and Glen Eagle Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glen Eagle Resources and CAT Strategic 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 CAT Strategic Metals are associated (or correlated) with Glen Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glen Eagle Resources has no effect on the direction of CAT Strategic i.e., CAT Strategic and Glen Eagle go up and down completely randomly.
Pair Corralation between CAT Strategic and Glen Eagle
Assuming the 90 days horizon CAT Strategic Metals is expected to generate 2.95 times more return on investment than Glen Eagle. However, CAT Strategic is 2.95 times more volatile than Glen Eagle Resources. It trades about 0.1 of its potential returns per unit of risk. Glen Eagle Resources is currently generating about -0.01 per unit of risk. If you would invest 1.10 in CAT Strategic Metals on August 25, 2024 and sell it today you would lose (0.70) from holding CAT Strategic Metals or give up 63.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAT Strategic Metals vs. Glen Eagle Resources
Performance |
| Timeline |
| CAT Strategic Metals |
| Glen Eagle Resources |
CAT Strategic and Glen Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAT Strategic and Glen Eagle
The main advantage of trading using opposite CAT Strategic and Glen Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAT Strategic position performs unexpectedly, Glen Eagle 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 Glen Eagle will offset losses from the drop in Glen Eagle's long position.| CAT Strategic vs. Glen Eagle Resources | CAT Strategic vs. Grizzly Discoveries | CAT Strategic vs. Silver Dollar Resources | CAT Strategic vs. Defense Metals Corp |
| Glen Eagle vs. CAT Strategic Metals | Glen Eagle vs. Grizzly Discoveries | Glen Eagle vs. Silver Dollar Resources | Glen Eagle vs. Defense Metals Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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