Correlation Between Malvern International and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Malvern International 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 Malvern International and CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malvern International and CATLIN GROUP , you can compare the effects of market volatilities on Malvern International 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 Malvern International with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malvern International and CATLIN GROUP.
Diversification Opportunities for Malvern International and CATLIN GROUP
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Malvern and CATLIN is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Malvern International and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and Malvern International 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 Malvern International 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 Malvern International i.e., Malvern International and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Malvern International and CATLIN GROUP
Assuming the 90 days trading horizon Malvern International is expected to generate 11.27 times more return on investment than CATLIN GROUP. However, Malvern International is 11.27 times more volatile than CATLIN GROUP . It trades about 0.37 of its potential returns per unit of risk. CATLIN GROUP is currently generating about -0.21 per unit of risk. If you would invest 1,800 in Malvern International on September 12, 2024 and sell it today you would earn a total of 400.00 from holding Malvern International or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malvern International vs. CATLIN GROUP
Performance |
| Timeline |
| Malvern International |
| CATLIN GROUP |
Malvern International and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malvern International and CATLIN GROUP
The main advantage of trading using opposite Malvern International and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malvern International 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.| Malvern International vs. National Atomic Co | Malvern International vs. OTP Bank Nyrt | Malvern International vs. Samsung Electronics Co | Malvern International vs. Samsung Electronics Co |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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