Correlation Between CATLIN GROUP and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Gamma Communications 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 Gamma Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Gamma Communications PLC, you can compare the effects of market volatilities on CATLIN GROUP and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Gamma Communications.
Diversification Opportunities for CATLIN GROUP and Gamma Communications
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CATLIN and Gamma is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications PLC 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Gamma Communications go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Gamma Communications
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 1.63 times less return on investment than Gamma Communications. In addition to that, CATLIN GROUP is 1.07 times more volatile than Gamma Communications PLC. It trades about 0.05 of its total potential returns per unit of risk. Gamma Communications PLC is currently generating about 0.08 per unit of volatility. If you would invest 107,793 in Gamma Communications PLC on September 12, 2024 and sell it today you would earn a total of 54,207 from holding Gamma Communications PLC or generate 50.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. Gamma Communications PLC
Performance |
| Timeline |
| CATLIN GROUP |
| Gamma Communications PLC |
CATLIN GROUP and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Gamma Communications
The main advantage of trading using opposite CATLIN GROUP and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| CATLIN GROUP vs. EVS Broadcast Equipment | CATLIN GROUP vs. Ironveld Plc | CATLIN GROUP vs. Broadcom | CATLIN GROUP vs. International Biotechnology Trust |
| Gamma Communications vs. Catalyst Media Group | Gamma Communications vs. CATLIN GROUP | Gamma Communications vs. Tamburi Investment Partners | Gamma Communications 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |