Correlation Between CATLIN GROUP and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Aurora Investment 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 Aurora Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Aurora Investment Trust, you can compare the effects of market volatilities on CATLIN GROUP and Aurora Investment 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 Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Aurora Investment.
Diversification Opportunities for CATLIN GROUP and Aurora Investment
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CATLIN and Aurora is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Aurora Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Investment Trust 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 Aurora Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Investment Trust has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Aurora Investment go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Aurora Investment
Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the Aurora Investment. But the stock apears to be less risky and, when comparing its historical volatility, CATLIN GROUP is 1.65 times less risky than Aurora Investment. The stock trades about -0.25 of its potential returns per unit of risk. The Aurora Investment Trust is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 22,900 in Aurora Investment Trust on November 3, 2024 and sell it today you would earn a total of 600.00 from holding Aurora Investment Trust or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. Aurora Investment Trust
Performance |
| Timeline |
| CATLIN GROUP |
| Aurora Investment Trust |
CATLIN GROUP and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Aurora Investment
The main advantage of trading using opposite CATLIN GROUP and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Aurora Investment 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 Aurora Investment will offset losses from the drop in Aurora Investment's long position.| CATLIN GROUP vs. Charter Communications Cl | CATLIN GROUP vs. Mobile Tornado Group | CATLIN GROUP vs. iShares Physical Silver | CATLIN GROUP vs. Zoom Video Communications |
| Aurora Investment vs. Quadrise Plc | Aurora Investment vs. ImmuPharma PLC | Aurora Investment vs. Intuitive Investments Group | Aurora Investment vs. European Metals Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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