Correlation Between CATLIN GROUP and Argentex Group
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Argentex Group 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 Argentex Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Argentex Group PLC, you can compare the effects of market volatilities on CATLIN GROUP and Argentex Group 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 Argentex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Argentex Group.
Diversification Opportunities for CATLIN GROUP and Argentex Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CATLIN and Argentex is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Argentex Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argentex Group PLC 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 Argentex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argentex Group PLC has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Argentex Group go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Argentex Group
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 0.07 times more return on investment than Argentex Group. However, CATLIN GROUP is 14.21 times less risky than Argentex Group. It trades about -0.21 of its potential returns per unit of risk. Argentex Group PLC is currently generating about -0.02 per unit of risk. If you would invest 9,500 in CATLIN GROUP on September 13, 2024 and sell it today you would lose (100.00) from holding CATLIN GROUP or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CATLIN GROUP vs. Argentex Group PLC
Performance |
| Timeline |
| CATLIN GROUP |
| Argentex Group PLC |
CATLIN GROUP and Argentex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Argentex Group
The main advantage of trading using opposite CATLIN GROUP and Argentex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Argentex Group 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 Argentex Group will offset losses from the drop in Argentex Group's long position.| CATLIN GROUP vs. Pfeiffer Vacuum Technology | CATLIN GROUP vs. Hilton Food Group | CATLIN GROUP vs. Sabien Technology Group | CATLIN GROUP vs. Spotify Technology SA |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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