Correlation Between CATLIN GROUP and Blue Star
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Blue Star 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 Blue Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Blue Star Capital, you can compare the effects of market volatilities on CATLIN GROUP and Blue Star 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 Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Blue Star.
Diversification Opportunities for CATLIN GROUP and Blue Star
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CATLIN and Blue is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Blue Star Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Star Capital 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 Blue Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Star Capital has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Blue Star go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Blue Star
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 0.17 times more return on investment than Blue Star. However, CATLIN GROUP is 5.87 times less risky than Blue Star. It trades about -0.53 of its potential returns per unit of risk. Blue Star Capital is currently generating about -0.44 per unit of risk. If you would invest 9,200 in CATLIN GROUP on January 9, 2025 and sell it today you would lose (750.00) from holding CATLIN GROUP or give up 8.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CATLIN GROUP vs. Blue Star Capital
Performance |
| Timeline |
| CATLIN GROUP |
| Blue Star Capital |
Risk-Adjusted Performance
OK
Weak | Strong |
CATLIN GROUP and Blue Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Blue Star
The main advantage of trading using opposite CATLIN GROUP and Blue Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Blue Star 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 Blue Star will offset losses from the drop in Blue Star's long position.| CATLIN GROUP vs. ImmuPharma PLC | CATLIN GROUP vs. European Metals Holdings | CATLIN GROUP vs. Calculus VCT plc | CATLIN GROUP vs. The Income Growth |
| Blue Star vs. Monster Beverage Corp | Blue Star vs. Jupiter Fund Management | Blue Star vs. Waste Management | Blue Star vs. bet at home AG |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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