Correlation Between CATLIN GROUP and Miton UK
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Miton UK 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 Miton UK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Miton UK MicroCap, you can compare the effects of market volatilities on CATLIN GROUP and Miton UK 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 Miton UK. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Miton UK.
Diversification Opportunities for CATLIN GROUP and Miton UK
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CATLIN and Miton is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Miton UK MicroCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miton UK MicroCap 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 Miton UK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miton UK MicroCap has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Miton UK go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Miton UK
Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the Miton UK. But the stock apears to be less risky and, when comparing its historical volatility, CATLIN GROUP is 2.33 times less risky than Miton UK. The stock trades about -0.21 of its potential returns per unit of risk. The Miton UK MicroCap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,440 in Miton UK MicroCap on September 14, 2024 and sell it today you would earn a total of 110.00 from holding Miton UK MicroCap or generate 2.48% 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. Miton UK MicroCap
Performance |
| Timeline |
| CATLIN GROUP |
| Miton UK MicroCap |
CATLIN GROUP and Miton UK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Miton UK
The main advantage of trading using opposite CATLIN GROUP and Miton UK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Miton UK 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 Miton UK will offset losses from the drop in Miton UK's 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 |
| Miton UK vs. Catalyst Media Group | Miton UK vs. CATLIN GROUP | Miton UK vs. Tamburi Investment Partners | Miton UK 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.
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