Correlation Between CATLIN GROUP and Quantum Blockchain

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

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

Diversification Opportunities for CATLIN GROUP and Quantum Blockchain

-0.64

Correlation Coefficient

CATLIN GROUP  Quantum Blockchain

Excellent diversification

The 3 months correlation between CATLIN and Quantum is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Quantum Blockchain Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum Blockchain 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 Quantum Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum Blockchain has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and Quantum Blockchain go up and down completely randomly.

Pair Corralation between CATLIN GROUP and Quantum Blockchain

Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 0.04 times more return on investment than Quantum Blockchain. However, CATLIN GROUP is 25.22 times less risky than Quantum Blockchain. It trades about -0.21 of its potential returns per unit of risk. Quantum Blockchain Technologies is currently generating about -0.2 per unit of risk. If you would invest  9,500  in CATLIN GROUP on September 22, 2024 and sell it today you would lose (100.00) from holding CATLIN GROUP or give up 1.05% of portfolio value over 90 days.

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

CATLIN GROUP   vs.  Quantum Blockchain Technologie

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

Quantum Blockchain

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum Blockchain Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Quantum Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CATLIN GROUP and Quantum Blockchain

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

The idea behind CATLIN GROUP and Quantum Blockchain Technologies 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.

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.