Correlation Between Norman Broadbent and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Norman Broadbent 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 Norman Broadbent and CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norman Broadbent Plc and CATLIN GROUP , you can compare the effects of market volatilities on Norman Broadbent 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 Norman Broadbent with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norman Broadbent and CATLIN GROUP.
Diversification Opportunities for Norman Broadbent and CATLIN GROUP
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Norman and CATLIN is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Norman Broadbent Plc and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and Norman Broadbent 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 Norman Broadbent 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 Norman Broadbent i.e., Norman Broadbent and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Norman Broadbent and CATLIN GROUP
Assuming the 90 days trading horizon Norman Broadbent Plc is expected to under-perform the CATLIN GROUP. In addition to that, Norman Broadbent is 5.3 times more volatile than CATLIN GROUP . It trades about -0.16 of its total potential returns per unit of risk. CATLIN GROUP is currently generating about -0.12 per unit of volatility. If you would invest 10,100 in CATLIN GROUP on November 3, 2024 and sell it today you would lose (1,100) from holding CATLIN GROUP or give up 10.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norman Broadbent Plc vs. CATLIN GROUP
Performance |
| Timeline |
| Norman Broadbent Plc |
| CATLIN GROUP |
Norman Broadbent and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norman Broadbent and CATLIN GROUP
The main advantage of trading using opposite Norman Broadbent and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norman Broadbent 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.| Norman Broadbent vs. Norwegian Air Shuttle | Norman Broadbent vs. International Biotechnology Trust | Norman Broadbent vs. Bytes Technology | Norman Broadbent vs. Take Two Interactive Software |
| CATLIN GROUP vs. Allianz Technology Trust | CATLIN GROUP vs. DXC Technology Co | CATLIN GROUP vs. Bloomsbury Publishing Plc | CATLIN GROUP vs. Concurrent Technologies Plc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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