Correlation Between CATLIN GROUP and BW Offshore
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and BW Offshore 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 BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and BW Offshore, you can compare the effects of market volatilities on CATLIN GROUP and BW Offshore 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 BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and BW Offshore.
Diversification Opportunities for CATLIN GROUP and BW Offshore
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CATLIN and 0RKH is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and BW Offshore go up and down completely randomly.
Pair Corralation between CATLIN GROUP and BW Offshore
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 0.09 times more return on investment than BW Offshore. However, CATLIN GROUP is 11.24 times less risky than BW Offshore. It trades about -0.14 of its potential returns per unit of risk. BW Offshore is currently generating about -0.14 per unit of risk. If you would invest 9,475 in CATLIN GROUP on September 3, 2024 and sell it today you would lose (75.00) from holding CATLIN GROUP or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. BW Offshore
Performance |
| Timeline |
| CATLIN GROUP |
| BW Offshore |
CATLIN GROUP and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and BW Offshore
The main advantage of trading using opposite CATLIN GROUP and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's 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 |
| BW Offshore vs. Catalyst Media Group | BW Offshore vs. CATLIN GROUP | BW Offshore vs. Magnora ASA | BW Offshore 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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