Correlation Between RTW Venture and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both RTW Venture 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 RTW Venture and CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTW Venture Fund and CATLIN GROUP , you can compare the effects of market volatilities on RTW Venture 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 RTW Venture with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTW Venture and CATLIN GROUP.
Diversification Opportunities for RTW Venture and CATLIN GROUP
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RTW and CATLIN is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding RTW Venture Fund and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and RTW Venture 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 RTW Venture Fund 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 RTW Venture i.e., RTW Venture and CATLIN GROUP go up and down completely randomly.
Pair Corralation between RTW Venture and CATLIN GROUP
Assuming the 90 days trading horizon RTW Venture is expected to generate 1.08 times less return on investment than CATLIN GROUP. But when comparing it to its historical volatility, RTW Venture Fund is 1.13 times less risky than CATLIN GROUP. It trades about 0.07 of its potential returns per unit of risk. CATLIN GROUP is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,250 in CATLIN GROUP on August 26, 2024 and sell it today you would earn a total of 2,250 from holding CATLIN GROUP or generate 31.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTW Venture Fund vs. CATLIN GROUP
Performance |
| Timeline |
| RTW Venture Fund |
| CATLIN GROUP |
RTW Venture and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTW Venture and CATLIN GROUP
The main advantage of trading using opposite RTW Venture and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTW Venture 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.| RTW Venture vs. Uniper SE | RTW Venture vs. Mulberry Group PLC | RTW Venture vs. London Security Plc | RTW Venture vs. Triad Group PLC |
| CATLIN GROUP vs. Neometals | CATLIN GROUP vs. Ebro Foods | CATLIN GROUP vs. Endeavour Mining Corp | CATLIN GROUP vs. BW Offshore |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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