Correlation Between CATLIN GROUP and North American
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and North American 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 North American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and The North American, you can compare the effects of market volatilities on CATLIN GROUP and North American 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 North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and North American.
Diversification Opportunities for CATLIN GROUP and North American
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CATLIN and North is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and The North American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American 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 North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and North American go up and down completely randomly.
Pair Corralation between CATLIN GROUP and North American
Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the North American. But the stock apears to be less risky and, when comparing its historical volatility, CATLIN GROUP is 1.57 times less risky than North American. The stock trades about -0.21 of its potential returns per unit of risk. The The North American is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 32,697 in The North American on October 23, 2024 and sell it today you would earn a total of 1,703 from holding The North American or generate 5.21% 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. The North American
Performance |
| Timeline |
| CATLIN GROUP |
| North American |
CATLIN GROUP and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and North American
The main advantage of trading using opposite CATLIN GROUP and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, North American 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 North American will offset losses from the drop in North American's 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 |
| North American vs. Catalyst Media Group | North American vs. CATLIN GROUP | North American vs. Tamburi Investment Partners | North American 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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