Correlation Between CATLIN GROUP and Alkemy Capital
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Alkemy Capital 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 Alkemy Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Alkemy Capital Investments, you can compare the effects of market volatilities on CATLIN GROUP and Alkemy Capital 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 Alkemy Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Alkemy Capital.
Diversification Opportunities for CATLIN GROUP and Alkemy Capital
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CATLIN and Alkemy is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Alkemy Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkemy Capital Inves 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 Alkemy Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkemy Capital Inves has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Alkemy Capital go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Alkemy Capital
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 3.4 times less return on investment than Alkemy Capital. But when comparing it to its historical volatility, CATLIN GROUP is 4.95 times less risky than Alkemy Capital. It trades about 0.06 of its potential returns per unit of risk. Alkemy Capital Investments is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,500 in Alkemy Capital Investments on September 14, 2024 and sell it today you would earn a total of 2,000 from holding Alkemy Capital Investments or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. Alkemy Capital Investments
Performance |
| Timeline |
| CATLIN GROUP |
| Alkemy Capital Inves |
CATLIN GROUP and Alkemy Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Alkemy Capital
The main advantage of trading using opposite CATLIN GROUP and Alkemy Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Alkemy Capital 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 Alkemy Capital will offset losses from the drop in Alkemy Capital's long position.| CATLIN GROUP vs. Alfa Financial Software | CATLIN GROUP vs. L3Harris Technologies | CATLIN GROUP vs. Cairo Communication SpA | CATLIN GROUP vs. Zoom Video Communications |
| Alkemy Capital vs. Synthomer plc | Alkemy Capital vs. G5 Entertainment AB | Alkemy Capital vs. Axway Software SA | Alkemy Capital vs. MediaZest plc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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