Correlation Between CATCo Reinsurance and Princess Private

Can any of the company-specific risk be diversified away by investing in both CATCo Reinsurance and Princess Private 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 CATCo Reinsurance and Princess Private into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CATCo Reinsurance Opportunities and Princess Private Equity, you can compare the effects of market volatilities on CATCo Reinsurance and Princess Private 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 CATCo Reinsurance with a short position of Princess Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATCo Reinsurance and Princess Private.

Diversification Opportunities for CATCo Reinsurance and Princess Private

0.05

Correlation Coefficient

CATCo Reinsurance  Princess Private

Significant diversification

The 3 months correlation between CATCo and Princess is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CATCo Reinsurance Opportunitie and Princess Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Princess Private Equity and CATCo Reinsurance 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 CATCo Reinsurance Opportunities are associated (or correlated) with Princess Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Princess Private Equity has no effect on the direction of CATCo Reinsurance i.e., CATCo Reinsurance and Princess Private go up and down completely randomly.

Pair Corralation between CATCo Reinsurance and Princess Private

If you would invest  84,700  in Princess Private Equity on October 20, 2024 and sell it today you would earn a total of  1,500  from holding Princess Private Equity or generate 1.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	10.53%
Values	Daily Returns

CATCo Reinsurance Opportunitie  vs.  Princess Private Equity

CATCo Reinsurance

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days CATCo Reinsurance Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather uncertain technical and fundamental indicators, CATCo Reinsurance exhibited solid returns over the last few months and may actually be approaching a breakup point.

Princess Private Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Princess Private Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Princess Private is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CATCo Reinsurance and Princess Private

The main advantage of trading using opposite CATCo Reinsurance and Princess Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATCo Reinsurance position performs unexpectedly, Princess Private 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 Princess Private will offset losses from the drop in Princess Private's long position.

The idea behind CATCo Reinsurance Opportunities and Princess Private Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.