Correlation Between Supermarket Income and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Supermarket Income 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 Supermarket Income and CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supermarket Income REIT and CATLIN GROUP , you can compare the effects of market volatilities on Supermarket Income 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 Supermarket Income with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and CATLIN GROUP.
Diversification Opportunities for Supermarket Income and CATLIN GROUP
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Supermarket and CATLIN is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and Supermarket Income 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 Supermarket Income REIT 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 Supermarket Income i.e., Supermarket Income and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Supermarket Income and CATLIN GROUP
Assuming the 90 days trading horizon Supermarket Income REIT is expected to generate 2.83 times more return on investment than CATLIN GROUP. However, Supermarket Income is 2.83 times more volatile than CATLIN GROUP . It trades about -0.03 of its potential returns per unit of risk. CATLIN GROUP is currently generating about -0.21 per unit of risk. If you would invest 6,800 in Supermarket Income REIT on October 24, 2024 and sell it today you would lose (70.00) from holding Supermarket Income REIT or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. CATLIN GROUP
Performance |
| Timeline |
| Supermarket Income REIT |
| CATLIN GROUP |
Supermarket Income and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and CATLIN GROUP
The main advantage of trading using opposite Supermarket Income and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income 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.| Supermarket Income vs. New Residential Investment | Supermarket Income vs. Sovereign Metals | Supermarket Income vs. Gaztransport et Technigaz | Supermarket Income vs. GreenX Metals |
| CATLIN GROUP vs. Supermarket Income REIT | CATLIN GROUP vs. Sealed Air Corp | CATLIN GROUP vs. Ebro Foods | CATLIN GROUP vs. Fair Oaks Income |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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