Correlation Between CATLIN GROUP and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and GreenX 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 GreenX 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 GreenX Metals, you can compare the effects of market volatilities on CATLIN GROUP and GreenX 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and GreenX Metals.
Diversification Opportunities for CATLIN GROUP and GreenX Metals
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CATLIN and GreenX is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and GreenX Metals go up and down completely randomly.
Pair Corralation between CATLIN GROUP and GreenX Metals
Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the GreenX Metals. But the stock apears to be less risky and, when comparing its historical volatility, CATLIN GROUP is 5.44 times less risky than GreenX Metals. The stock trades about -0.25 of its potential returns per unit of risk. The GreenX Metals is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,450 in GreenX Metals on October 23, 2024 and sell it today you would earn a total of 350.00 from holding GreenX Metals or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. GreenX Metals
Performance |
| Timeline |
| CATLIN GROUP |
| GreenX Metals |
CATLIN GROUP and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and GreenX Metals
The main advantage of trading using opposite CATLIN GROUP and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, GreenX 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| CATLIN GROUP vs. GreenX Metals | CATLIN GROUP vs. Nordic Semiconductor ASA | CATLIN GROUP vs. Eastinco Mining Exploration | CATLIN GROUP vs. Elmos Semiconductor SE |
| GreenX Metals vs. Advanced Medical Solutions | GreenX Metals vs. AMG Advanced Metallurgical | GreenX Metals vs. LBG Media PLC | GreenX Metals vs. Medical Properties Trust |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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