Correlation Between GlobalData PLC and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both GlobalData PLC and CATLIN GROUP 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 GlobalData PLC and CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalData PLC and CATLIN GROUP , you can compare the effects of market volatilities on GlobalData PLC and CATLIN GROUP 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 GlobalData PLC with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and CATLIN GROUP.
Diversification Opportunities for GlobalData PLC and CATLIN GROUP
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between GlobalData and CATLIN is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and GlobalData PLC 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 GlobalData PLC are associated (or correlated) with CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of GlobalData PLC i.e., GlobalData PLC and CATLIN GROUP go up and down completely randomly.
Pair Corralation between GlobalData PLC and CATLIN GROUP
Assuming the 90 days trading horizon GlobalData PLC is expected to generate 1.0 times less return on investment than CATLIN GROUP. In addition to that, GlobalData PLC is 1.3 times more volatile than CATLIN GROUP . It trades about 0.04 of its total potential returns per unit of risk. CATLIN GROUP is currently generating about 0.05 per unit of volatility. If you would invest 6,900 in CATLIN GROUP on September 23, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalData PLC vs. CATLIN GROUP
Performance |
| Timeline |
| GlobalData PLC |
| CATLIN GROUP |
GlobalData PLC and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalData PLC and CATLIN GROUP
The main advantage of trading using opposite GlobalData PLC and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC position performs unexpectedly, CATLIN GROUP 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP's long position.| GlobalData PLC vs. Toyota Motor Corp | GlobalData PLC vs. SoftBank Group Corp | GlobalData PLC vs. Fannie Mae | GlobalData PLC vs. Panasonic Corp |
| 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 |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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