Correlation Between CATLIN GROUP and TR Property
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and TR Property 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 TR Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and TR Property Investment, you can compare the effects of market volatilities on CATLIN GROUP and TR Property 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 TR Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and TR Property.
Diversification Opportunities for CATLIN GROUP and TR Property
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CATLIN and TRY is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and TR Property Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TR Property Investment 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 TR Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TR Property Investment has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and TR Property go up and down completely randomly.
Pair Corralation between CATLIN GROUP and TR Property
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 1.14 times more return on investment than TR Property. However, CATLIN GROUP is 1.14 times more volatile than TR Property Investment. It trades about 0.05 of its potential returns per unit of risk. TR Property Investment is currently generating about 0.01 per unit of risk. If you would invest 6,900 in CATLIN GROUP on September 14, 2024 and sell it today you would earn a total of 2,500 from holding CATLIN GROUP or generate 36.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. TR Property Investment
Performance |
| Timeline |
| CATLIN GROUP |
| TR Property Investment |
CATLIN GROUP and TR Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and TR Property
The main advantage of trading using opposite CATLIN GROUP and TR Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, TR Property 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 TR Property will offset losses from the drop in TR Property'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 |
| TR Property vs. Catalyst Media Group | TR Property vs. CATLIN GROUP | TR Property vs. Tamburi Investment Partners | TR Property 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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