Correlation Between CATLIN GROUP and Ecofin Global

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

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

Diversification Opportunities for CATLIN GROUP and Ecofin Global

0.0

Correlation Coefficient

CATLIN GROUP  Ecofin Global

Pay attention - limited upside

The 3 months correlation between CATLIN and Ecofin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities 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 Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Ecofin Global go up and down completely randomly.

Pair Corralation between CATLIN GROUP and Ecofin Global

If you would invest (100.00) in CATLIN GROUP on December 5, 2024 and sell it today you would earn a total of  100.00  from holding CATLIN GROUP or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CATLIN GROUP   vs.  Ecofin Global Utilities

CATLIN GROUP

Risk-Adjusted Performance

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Ecofin Global Utilities

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CATLIN GROUP and Ecofin Global

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

The idea behind CATLIN GROUP and Ecofin Global Utilities 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.