Correlation Between CATLIN GROUP and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Sunny Optical 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 Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Sunny Optical Technology, you can compare the effects of market volatilities on CATLIN GROUP and Sunny Optical 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 Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Sunny Optical.
Diversification Opportunities for CATLIN GROUP and Sunny Optical
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CATLIN and Sunny is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology 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 Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Sunny Optical go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Sunny Optical
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 0.45 times more return on investment than Sunny Optical. However, CATLIN GROUP is 2.23 times less risky than Sunny Optical. It trades about 0.04 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.0 per unit of risk. If you would invest 7,200 in CATLIN GROUP on September 3, 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 | Weak |
| Accuracy | 88.35% |
| Values | Daily Returns |
CATLIN GROUP vs. Sunny Optical Technology
Performance |
| Timeline |
| CATLIN GROUP |
| Sunny Optical Technology |
CATLIN GROUP and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Sunny Optical
The main advantage of trading using opposite CATLIN GROUP and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical'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 |
| Sunny Optical vs. Catalyst Media Group | Sunny Optical vs. CATLIN GROUP | Sunny Optical vs. Magnora ASA | Sunny Optical 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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