Correlation Between CATLIN GROUP and Europa Metals
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Europa Metals 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 Europa Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Europa Metals, you can compare the effects of market volatilities on CATLIN GROUP and Europa Metals 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 Europa Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Europa Metals.
Diversification Opportunities for CATLIN GROUP and Europa Metals
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CATLIN and Europa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Europa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europa Metals 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 Europa Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europa Metals has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Europa Metals go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Europa Metals
If you would invest 200.00 in Europa Metals on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Europa Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CATLIN GROUP vs. Europa Metals
Performance |
| Timeline |
| CATLIN GROUP |
| Europa Metals |
CATLIN GROUP and Europa Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Europa Metals
The main advantage of trading using opposite CATLIN GROUP and Europa Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Europa Metals 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 Europa Metals will offset losses from the drop in Europa Metals' long position.| CATLIN GROUP vs. Samsung Electronics Co | CATLIN GROUP vs. Broadridge Financial Solutions | CATLIN GROUP vs. Lindsell Train Investment | CATLIN GROUP vs. Ebro Foods |
| Europa Metals vs. Givaudan SA | Europa Metals vs. Antofagasta PLC | Europa Metals vs. Centamin PLC | Europa Metals vs. Atalaya Mining |
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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