Correlation Between CATLIN GROUP and Weiss Korea
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Weiss Korea 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 Weiss Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Weiss Korea Opportunity, you can compare the effects of market volatilities on CATLIN GROUP and Weiss Korea 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 Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Weiss Korea.
Diversification Opportunities for CATLIN GROUP and Weiss Korea
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CATLIN and Weiss is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity 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 Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Weiss Korea go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Weiss Korea
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 1.28 times more return on investment than Weiss Korea. However, CATLIN GROUP is 1.28 times more volatile than Weiss Korea Opportunity. It trades about 0.06 of its potential returns per unit of risk. Weiss Korea Opportunity is currently generating about -0.03 per unit of risk. If you would invest 7,500 in CATLIN GROUP on September 14, 2024 and sell it today you would earn a total of 1,900 from holding CATLIN GROUP or generate 25.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. Weiss Korea Opportunity
Performance |
| Timeline |
| CATLIN GROUP |
| Weiss Korea Opportunity |
CATLIN GROUP and Weiss Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Weiss Korea
The main advantage of trading using opposite CATLIN GROUP and Weiss Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, Weiss Korea 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 Weiss Korea will offset losses from the drop in Weiss Korea'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 |
| Weiss Korea vs. Schroders Investment Trusts | Weiss Korea vs. Aurora Investment Trust | Weiss Korea vs. Neometals | Weiss Korea vs. Cornish Metals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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