Correlation Between CATLIN GROUP and Livermore Investments
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Livermore 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 Livermore 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 Livermore Investments Group, you can compare the effects of market volatilities on CATLIN GROUP and Livermore 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 Livermore Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Livermore Investments.
Diversification Opportunities for CATLIN GROUP and Livermore Investments
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CATLIN and Livermore is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Livermore Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livermore 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 Livermore Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livermore Investments has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Livermore Investments go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Livermore Investments
Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the Livermore Investments. But the stock apears to be less risky and, when comparing its historical volatility, CATLIN GROUP is 2.92 times less risky than Livermore Investments. The stock trades about -0.21 of its potential returns per unit of risk. The Livermore Investments Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,500 in Livermore Investments Group on September 14, 2024 and sell it today you would earn a total of 150.00 from holding Livermore Investments Group or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. Livermore Investments Group
Performance |
| Timeline |
| CATLIN GROUP |
| Livermore Investments |
CATLIN GROUP and Livermore Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Livermore Investments
The main advantage of trading using opposite CATLIN GROUP and Livermore Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Livermore 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 Livermore Investments will offset losses from the drop in Livermore Investments' long position.| CATLIN GROUP vs. Alfa Financial Software | CATLIN GROUP vs. L3Harris Technologies | CATLIN GROUP vs. Cairo Communication SpA | CATLIN GROUP vs. Zoom Video Communications |
| Livermore Investments vs. Catalyst Media Group | Livermore Investments vs. CATLIN GROUP | Livermore Investments vs. Tamburi Investment Partners | Livermore Investments 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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