Correlation Between CATLIN GROUP and United Airlines
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and United Airlines 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 CATLIN GROUP and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and United Airlines Holdings, you can compare the effects of market volatilities on CATLIN GROUP and United Airlines 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 CATLIN GROUP with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and United Airlines.
Diversification Opportunities for CATLIN GROUP and United Airlines
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CATLIN and United is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings and CATLIN GROUP 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 CATLIN GROUP are associated (or correlated) with United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and United Airlines go up and down completely randomly.
Pair Corralation between CATLIN GROUP and United Airlines
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 0.34 times more return on investment than United Airlines. However, CATLIN GROUP is 2.93 times less risky than United Airlines. It trades about -0.04 of its potential returns per unit of risk. United Airlines Holdings is currently generating about -0.02 per unit of risk. If you would invest 9,400 in CATLIN GROUP on December 1, 2024 and sell it today you would lose (200.00) from holding CATLIN GROUP or give up 2.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
CATLIN GROUP vs. United Airlines Holdings
Performance |
Timeline |
CATLIN GROUP |
United Airlines Holdings |
CATLIN GROUP and United Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CATLIN GROUP and United Airlines
The main advantage of trading using opposite CATLIN GROUP and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.CATLIN GROUP vs. Concurrent Technologies Plc | CATLIN GROUP vs. Raytheon Technologies Corp | CATLIN GROUP vs. Air Products Chemicals | CATLIN GROUP vs. SMA Solar Technology |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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