Correlation Between CATLIN GROUP and Coor Service

Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP and Coor Service 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 Coor Service into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CATLIN GROUP and Coor Service Management, you can compare the effects of market volatilities on CATLIN GROUP and Coor Service 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 Coor Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Coor Service.

Diversification Opportunities for CATLIN GROUP and Coor Service

0.86

Correlation Coefficient

CATLIN GROUP  Coor Service

Very poor diversification

The 3 months correlation between CATLIN and Coor is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Coor Service Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coor Service Management 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 Coor Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coor Service Management has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Coor Service go up and down completely randomly.

Pair Corralation between CATLIN GROUP and Coor Service

Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the Coor Service. But the stock apears to be less risky and, when comparing its historical volatility, CATLIN GROUP is 5.44 times less risky than Coor Service. The stock trades about -0.21 of its potential returns per unit of risk. The Coor Service Management is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  3,483  in Coor Service Management on September 16, 2024 and sell it today you would lose (25.00) from holding Coor Service Management or give up 0.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

CATLIN GROUP   vs.  Coor Service Management

CATLIN GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CATLIN GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, CATLIN GROUP is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Coor Service Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coor Service Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CATLIN GROUP and Coor Service

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

The idea behind CATLIN GROUP and Coor Service Management 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.