Correlation Between CATLIN GROUP and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and XLMedia PLC 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 XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and XLMedia PLC, you can compare the effects of market volatilities on CATLIN GROUP and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and XLMedia PLC.
Diversification Opportunities for CATLIN GROUP and XLMedia PLC
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CATLIN and XLMedia is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and XLMedia PLC go up and down completely randomly.
Pair Corralation between CATLIN GROUP and XLMedia PLC
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 2.6 times less return on investment than XLMedia PLC. But when comparing it to its historical volatility, CATLIN GROUP is 4.06 times less risky than XLMedia PLC. It trades about 0.05 of its potential returns per unit of risk. XLMedia PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 975.00 in XLMedia PLC on September 12, 2024 and sell it today you would earn a total of 225.00 from holding XLMedia PLC or generate 23.08% 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. XLMedia PLC
Performance |
| Timeline |
| CATLIN GROUP |
| XLMedia PLC |
CATLIN GROUP and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and XLMedia PLC
The main advantage of trading using opposite CATLIN GROUP and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| CATLIN GROUP vs. EVS Broadcast Equipment | CATLIN GROUP vs. Ironveld Plc | CATLIN GROUP vs. Broadcom | CATLIN GROUP vs. International Biotechnology Trust |
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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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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