Correlation Between CATLIN GROUP and RTW Venture
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and RTW Venture 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 RTW Venture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and RTW Venture Fund, you can compare the effects of market volatilities on CATLIN GROUP and RTW Venture 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 RTW Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and RTW Venture.
Diversification Opportunities for CATLIN GROUP and RTW Venture
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CATLIN and RTW is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and RTW Venture Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTW Venture Fund 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 RTW Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTW Venture Fund has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and RTW Venture go up and down completely randomly.
Pair Corralation between CATLIN GROUP and RTW Venture
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 1.52 times less return on investment than RTW Venture. But when comparing it to its historical volatility, CATLIN GROUP is 1.06 times less risky than RTW Venture. It trades about 0.03 of its potential returns per unit of risk. RTW Venture Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 104.00 in RTW Venture Fund on November 3, 2024 and sell it today you would earn a total of 35.00 from holding RTW Venture Fund or generate 33.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
CATLIN GROUP vs. RTW Venture Fund
Performance |
| Timeline |
| CATLIN GROUP |
| RTW Venture Fund |
CATLIN GROUP and RTW Venture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and RTW Venture
The main advantage of trading using opposite CATLIN GROUP and RTW Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, RTW Venture 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 RTW Venture will offset losses from the drop in RTW Venture's long position.| CATLIN GROUP vs. Charter Communications Cl | CATLIN GROUP vs. Mobile Tornado Group | CATLIN GROUP vs. iShares Physical Silver | CATLIN GROUP vs. Zoom Video Communications |
| RTW Venture vs. Bisichi Mining PLC | RTW Venture vs. Fortuna Silver Mines | RTW Venture vs. Seraphim Space Investment | RTW Venture vs. Hecla Mining Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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