Correlation Between CATLIN GROUP and PCI PAL
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and PCI PAL 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 PCI PAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and PCI PAL PLC, you can compare the effects of market volatilities on CATLIN GROUP and PCI PAL 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 PCI PAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and PCI PAL.
Diversification Opportunities for CATLIN GROUP and PCI PAL
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CATLIN and PCI is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and PCI PAL PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCI PAL PLC 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 PCI PAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCI PAL PLC has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and PCI PAL go up and down completely randomly.
Pair Corralation between CATLIN GROUP and PCI PAL
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 1.09 times less return on investment than PCI PAL. But when comparing it to its historical volatility, CATLIN GROUP is 1.77 times less risky than PCI PAL. It trades about 0.05 of its potential returns per unit of risk. PCI PAL PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,050 in PCI PAL PLC on September 24, 2024 and sell it today you would earn a total of 1,150 from holding PCI PAL PLC or generate 22.77% 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. PCI PAL PLC
Performance |
| Timeline |
| CATLIN GROUP |
| PCI PAL PLC |
CATLIN GROUP and PCI PAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and PCI PAL
The main advantage of trading using opposite CATLIN GROUP and PCI PAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, PCI PAL 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 PCI PAL will offset losses from the drop in PCI PAL's long position.| CATLIN GROUP vs. Vitec Software Group | CATLIN GROUP vs. Auction Technology Group | CATLIN GROUP vs. Cairo Communication SpA | CATLIN GROUP vs. Take Two Interactive Software |
| PCI PAL vs. Catalyst Media Group | PCI PAL vs. CATLIN GROUP | PCI PAL vs. Tamburi Investment Partners | PCI PAL 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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