Correlation Between CATLIN GROUP and Datagroup
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Datagroup 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 Datagroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Datagroup SE, you can compare the effects of market volatilities on CATLIN GROUP and Datagroup 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 Datagroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Datagroup.
Diversification Opportunities for CATLIN GROUP and Datagroup
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CATLIN and Datagroup is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Datagroup SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagroup SE 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 Datagroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagroup SE has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Datagroup go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Datagroup
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 0.75 times more return on investment than Datagroup. However, CATLIN GROUP is 1.34 times less risky than Datagroup. It trades about 0.04 of its potential returns per unit of risk. Datagroup SE is currently generating about -0.02 per unit of risk. If you would invest 7,200 in CATLIN GROUP on September 4, 2024 and sell it today you would earn a total of 2,200 from holding CATLIN GROUP or generate 30.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
CATLIN GROUP vs. Datagroup SE
Performance |
| Timeline |
| CATLIN GROUP |
| Datagroup SE |
CATLIN GROUP and Datagroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Datagroup
The main advantage of trading using opposite CATLIN GROUP and Datagroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Datagroup 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 Datagroup will offset losses from the drop in Datagroup's long position.| CATLIN GROUP vs. Tungsten West PLC | CATLIN GROUP vs. Versarien PLC | CATLIN GROUP vs. Quantum Blockchain Technologies | CATLIN GROUP vs. Malvern International |
| Datagroup vs. Samsung Electronics Co | Datagroup vs. Samsung Electronics Co | Datagroup vs. Hyundai Motor | Datagroup vs. Toyota Motor 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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