Correlation Between CATLIN GROUP and Marks
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Marks 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 Marks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Marks and Spencer, you can compare the effects of market volatilities on CATLIN GROUP and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Marks.
Diversification Opportunities for CATLIN GROUP and Marks
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CATLIN and Marks is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Marks go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Marks
Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the Marks. But the stock apears to be less risky and, when comparing its historical volatility, CATLIN GROUP is 6.5 times less risky than Marks. The stock trades about -0.21 of its potential returns per unit of risk. The Marks and Spencer is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 37,801 in Marks and Spencer on September 23, 2024 and sell it today you would earn a total of 139.00 from holding Marks and Spencer or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. Marks and Spencer
Performance |
| Timeline |
| CATLIN GROUP |
| Marks and Spencer |
CATLIN GROUP and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Marks
The main advantage of trading using opposite CATLIN GROUP and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| CATLIN GROUP vs. Blackstone Loan Financing | CATLIN GROUP vs. Public Storage | CATLIN GROUP vs. Kinnevik Investment AB | CATLIN GROUP vs. GlobalData PLC |
| Marks vs. Catalyst Media Group | Marks vs. CATLIN GROUP | Marks vs. Tamburi Investment Partners | Marks 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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