Correlation Between Ironveld Plc and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Ironveld 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 Ironveld 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 Ironveld Plc and CATLIN GROUP , you can compare the effects of market volatilities on Ironveld 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 Ironveld Plc with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ironveld Plc and CATLIN GROUP.
Diversification Opportunities for Ironveld Plc and CATLIN GROUP
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ironveld and CATLIN is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ironveld Plc and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and Ironveld 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 Ironveld 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 Ironveld Plc i.e., Ironveld Plc and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Ironveld Plc and CATLIN GROUP
Assuming the 90 days trading horizon Ironveld Plc is expected to generate 3.51 times more return on investment than CATLIN GROUP. However, Ironveld Plc is 3.51 times more volatile than CATLIN GROUP . It trades about 0.08 of its potential returns per unit of risk. CATLIN GROUP is currently generating about -0.21 per unit of risk. If you would invest 3.70 in Ironveld Plc on September 13, 2024 and sell it today you would earn a total of 0.05 from holding Ironveld Plc or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ironveld Plc vs. CATLIN GROUP
Performance |
| Timeline |
| Ironveld Plc |
| CATLIN GROUP |
Ironveld Plc and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ironveld Plc and CATLIN GROUP
The main advantage of trading using opposite Ironveld Plc and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ironveld 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.| Ironveld Plc vs. Givaudan SA | Ironveld Plc vs. Antofagasta PLC | Ironveld Plc vs. Ferrexpo PLC | Ironveld Plc vs. Atalaya Mining |
| CATLIN GROUP vs. Pfeiffer Vacuum Technology | CATLIN GROUP vs. Hilton Food Group | CATLIN GROUP vs. Sabien Technology Group | CATLIN GROUP vs. Spotify Technology SA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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