Correlation Between IShares Dow and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both IShares Dow and CATLIN GROUP 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 IShares Dow and CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Dow Jones and CATLIN GROUP , you can compare the effects of market volatilities on IShares Dow and CATLIN GROUP 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 IShares Dow with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Dow and CATLIN GROUP.
Diversification Opportunities for IShares Dow and CATLIN GROUP
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and CATLIN is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding iShares Dow Jones and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and IShares Dow 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 iShares Dow Jones are associated (or correlated) with CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of IShares Dow i.e., IShares Dow and CATLIN GROUP go up and down completely randomly.
Pair Corralation between IShares Dow and CATLIN GROUP
Assuming the 90 days trading horizon iShares Dow Jones is expected to generate 0.52 times more return on investment than CATLIN GROUP. However, iShares Dow Jones is 1.93 times less risky than CATLIN GROUP. It trades about 0.09 of its potential returns per unit of risk. CATLIN GROUP is currently generating about 0.03 per unit of risk. If you would invest 5,396 in iShares Dow Jones on December 5, 2024 and sell it today you would earn a total of 1,975 from holding iShares Dow Jones or generate 36.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Dow Jones vs. CATLIN GROUP
Performance |
Timeline |
iShares Dow Jones |
CATLIN GROUP |
IShares Dow and CATLIN GROUP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Dow and CATLIN GROUP
The main advantage of trading using opposite IShares Dow and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Dow position performs unexpectedly, CATLIN GROUP 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP's long position.IShares Dow vs. iShares MSCI Japan | IShares Dow vs. iShares JP Morgan | IShares Dow vs. iShares MSCI Europe | IShares Dow vs. iShares Nasdaq Biotechnology |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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