Correlation Between CATLIN GROUP and Hon Hai
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Hon Hai 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 Hon Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Hon Hai Precision, you can compare the effects of market volatilities on CATLIN GROUP and Hon Hai 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 Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Hon Hai.
Diversification Opportunities for CATLIN GROUP and Hon Hai
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CATLIN and Hon is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision 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 Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Hon Hai go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Hon Hai
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 0.57 times more return on investment than Hon Hai. However, CATLIN GROUP is 1.76 times less risky than Hon Hai. It trades about 0.01 of its potential returns per unit of risk. Hon Hai Precision is currently generating about -0.19 per unit of risk. If you would invest 9,500 in CATLIN GROUP on August 26, 2024 and sell it today you would earn a total of 0.00 from holding CATLIN GROUP or generate 0.0% 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. Hon Hai Precision
Performance |
| Timeline |
| CATLIN GROUP |
| Hon Hai Precision |
CATLIN GROUP and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Hon Hai
The main advantage of trading using opposite CATLIN GROUP and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.| CATLIN GROUP vs. Edita Food Industries | CATLIN GROUP vs. Leroy Seafood Group | CATLIN GROUP vs. Southern Copper Corp | CATLIN GROUP vs. Jacquet Metal Service |
| Hon Hai vs. Catalyst Media Group | Hon Hai vs. CATLIN GROUP | Hon Hai vs. Tamburi Investment Partners | Hon Hai 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |