Correlation Between CATLIN GROUP and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Beeks Trading 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 Beeks Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Beeks Trading, you can compare the effects of market volatilities on CATLIN GROUP and Beeks Trading 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 Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Beeks Trading.
Diversification Opportunities for CATLIN GROUP and Beeks Trading
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CATLIN and Beeks is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Beeks Trading go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Beeks Trading
Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the Beeks Trading. But the stock apears to be less risky and, when comparing its historical volatility, CATLIN GROUP is 11.71 times less risky than Beeks Trading. The stock trades about -0.22 of its potential returns per unit of risk. The Beeks Trading is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 25,200 in Beeks Trading on September 24, 2024 and sell it today you would earn a total of 2,300 from holding Beeks Trading or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. Beeks Trading
Performance |
| Timeline |
| CATLIN GROUP |
| Beeks Trading |
CATLIN GROUP and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Beeks Trading
The main advantage of trading using opposite CATLIN GROUP and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| CATLIN GROUP vs. Vitec Software Group | CATLIN GROUP vs. Auction Technology Group | CATLIN GROUP vs. Cairo Communication SpA | CATLIN GROUP vs. Take Two Interactive Software |
| Beeks Trading vs. Catalyst Media Group | Beeks Trading vs. CATLIN GROUP | Beeks Trading vs. Tamburi Investment Partners | Beeks Trading vs. Magnora ASA |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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