Correlation Between Golden Metal and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Golden Metal 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 Golden Metal and CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Metal Resources and CATLIN GROUP , you can compare the effects of market volatilities on Golden Metal 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 Golden Metal with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and CATLIN GROUP.
Diversification Opportunities for Golden Metal and CATLIN GROUP
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and CATLIN is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and Golden Metal 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 Golden Metal Resources 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 Golden Metal i.e., Golden Metal and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Golden Metal and CATLIN GROUP
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 4.98 times more return on investment than CATLIN GROUP. However, Golden Metal is 4.98 times more volatile than CATLIN GROUP . It trades about -0.01 of its potential returns per unit of risk. CATLIN GROUP is currently generating about -0.12 per unit of risk. If you would invest 3,600 in Golden Metal Resources on October 20, 2024 and sell it today you would lose (400.00) from holding Golden Metal Resources or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. CATLIN GROUP
Performance |
| Timeline |
| Golden Metal Resources |
| CATLIN GROUP |
Golden Metal and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and CATLIN GROUP
The main advantage of trading using opposite Golden Metal and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal 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.| Golden Metal vs. Raymond James Financial | Golden Metal vs. Metro Bank PLC | Golden Metal vs. Synchrony Financial | Golden Metal vs. Tetragon Financial Group |
| CATLIN GROUP vs. Sartorius Stedim Biotech | CATLIN GROUP vs. Flow Traders NV | CATLIN GROUP vs. Travel Leisure Co | CATLIN GROUP vs. Raytheon Technologies Corp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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