Correlation Between CATLIN GROUP and Apax Global
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Apax Global 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 Apax Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Apax Global Alpha, you can compare the effects of market volatilities on CATLIN GROUP and Apax Global 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 Apax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Apax Global.
Diversification Opportunities for CATLIN GROUP and Apax Global
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CATLIN and Apax is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Apax Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apax Global Alpha 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 Apax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apax Global Alpha has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Apax Global go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Apax Global
Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the Apax Global. But the stock apears to be less risky and, when comparing its historical volatility, CATLIN GROUP is 2.35 times less risky than Apax Global. The stock trades about -0.28 of its potential returns per unit of risk. The Apax Global Alpha is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13,960 in Apax Global Alpha on October 20, 2024 and sell it today you would earn a total of 60.00 from holding Apax Global Alpha or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
CATLIN GROUP vs. Apax Global Alpha
Performance |
| Timeline |
| CATLIN GROUP |
| Apax Global Alpha |
CATLIN GROUP and Apax Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Apax Global
The main advantage of trading using opposite CATLIN GROUP and Apax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Apax Global 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 Apax Global will offset losses from the drop in Apax Global's long position.| CATLIN GROUP vs. Sartorius Stedim Biotech | CATLIN GROUP vs. Flow Traders NV | CATLIN GROUP vs. Travel Leisure Co | CATLIN GROUP vs. Raytheon Technologies Corp |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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