Correlation Between Auction Technology and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Auction Technology 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 Auction Technology and CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and CATLIN GROUP , you can compare the effects of market volatilities on Auction Technology 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 Auction Technology with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and CATLIN GROUP.
Diversification Opportunities for Auction Technology and CATLIN GROUP
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Auction and CATLIN is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and Auction Technology 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 Auction Technology Group 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 Auction Technology i.e., Auction Technology and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Auction Technology and CATLIN GROUP
Assuming the 90 days trading horizon Auction Technology Group is expected to generate 16.62 times more return on investment than CATLIN GROUP. However, Auction Technology is 16.62 times more volatile than CATLIN GROUP . It trades about 0.28 of its potential returns per unit of risk. CATLIN GROUP is currently generating about -0.22 per unit of risk. If you would invest 44,500 in Auction Technology Group on September 24, 2024 and sell it today you would earn a total of 10,900 from holding Auction Technology Group or generate 24.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Auction Technology Group vs. CATLIN GROUP
Performance |
Timeline |
Auction Technology |
CATLIN GROUP |
Auction Technology and CATLIN GROUP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Auction Technology and CATLIN GROUP
The main advantage of trading using opposite Auction Technology and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology 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.Auction Technology vs. United States Steel | Auction Technology vs. Lowland Investment Co | Auction Technology vs. Central Asia Metals | Auction Technology vs. Tata Steel Limited |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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