Correlation Between CATLIN GROUP and EJF Investments
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and EJF Investments 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 EJF Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and EJF Investments, you can compare the effects of market volatilities on CATLIN GROUP and EJF Investments 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 EJF Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and EJF Investments.
Diversification Opportunities for CATLIN GROUP and EJF Investments
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CATLIN and EJF is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and EJF Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EJF Investments 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 EJF Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EJF Investments has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and EJF Investments go up and down completely randomly.
Pair Corralation between CATLIN GROUP and EJF Investments
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 1.34 times less return on investment than EJF Investments. In addition to that, CATLIN GROUP is 1.19 times more volatile than EJF Investments. It trades about 0.04 of its total potential returns per unit of risk. EJF Investments is currently generating about 0.07 per unit of volatility. If you would invest 9,459 in EJF Investments on November 3, 2024 and sell it today you would earn a total of 2,341 from holding EJF Investments or generate 24.75% 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. EJF Investments
Performance |
| Timeline |
| CATLIN GROUP |
| EJF Investments |
CATLIN GROUP and EJF Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and EJF Investments
The main advantage of trading using opposite CATLIN GROUP and EJF Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, EJF Investments 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 EJF Investments will offset losses from the drop in EJF Investments' 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 |
| EJF Investments vs. Eastinco Mining Exploration | EJF Investments vs. Fulcrum Metals PLC | EJF Investments vs. Cornish Metals | EJF Investments vs. Wheaton Precious Metals |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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