Correlation Between CATLIN GROUP and Charter Communications
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Charter Communications 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 CATLIN GROUP and Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Charter Communications Cl, you can compare the effects of market volatilities on CATLIN GROUP and Charter Communications 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 CATLIN GROUP with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Charter Communications.
Diversification Opportunities for CATLIN GROUP and Charter Communications
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CATLIN and Charter is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Charter Communications Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and CATLIN GROUP 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 CATLIN GROUP are associated (or correlated) with Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Charter Communications go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Charter Communications
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 1.89 times less return on investment than Charter Communications. But when comparing it to its historical volatility, CATLIN GROUP is 1.15 times less risky than Charter Communications. It trades about 0.07 of its potential returns per unit of risk. Charter Communications Cl is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 27,174 in Charter Communications Cl on September 3, 2024 and sell it today you would earn a total of 12,221 from holding Charter Communications Cl or generate 44.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.67% |
| Values | Daily Returns |
CATLIN GROUP vs. Charter Communications Cl
Performance |
| Timeline |
| CATLIN GROUP |
| Charter Communications |
CATLIN GROUP and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Charter Communications
The main advantage of trading using opposite CATLIN GROUP and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| CATLIN GROUP vs. Molson Coors Beverage | CATLIN GROUP vs. Flowtech Fluidpower plc | CATLIN GROUP vs. CleanTech Lithium plc | CATLIN GROUP vs. Monster Beverage Corp |
| Charter Communications vs. Catalyst Media Group | Charter Communications vs. CATLIN GROUP | Charter Communications vs. Magnora ASA | Charter Communications vs. RTW Venture Fund |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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