Correlation Between Intuitive Investments and CATLIN GROUP

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

By analyzing existing cross correlation between Intuitive Investments Group and CATLIN GROUP , you can compare the effects of market volatilities on Intuitive Investments 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 Intuitive Investments with a short position of CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Investments and CATLIN GROUP.

Diversification Opportunities for Intuitive Investments and CATLIN GROUP

0.1

Correlation Coefficient

Intuitive Investments  CATLIN GROUP

Average diversification

The 3 months correlation between Intuitive and CATLIN is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP and Intuitive Investments 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 Intuitive Investments Group 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 Intuitive Investments i.e., Intuitive Investments and CATLIN GROUP go up and down completely randomly.

Pair Corralation between Intuitive Investments and CATLIN GROUP

Assuming the 90 days trading horizon Intuitive Investments Group is expected to under-perform the CATLIN GROUP. In addition to that, Intuitive Investments is 2.85 times more volatile than CATLIN GROUP . It trades about -0.02 of its total potential returns per unit of risk. CATLIN GROUP is currently generating about -0.04 per unit of volatility. 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intuitive Investments Group  vs.  CATLIN GROUP

Intuitive Investments

Risk-Adjusted Performance

Very Weak

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

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

Pair Trading with Intuitive Investments and CATLIN GROUP

The main advantage of trading using opposite Intuitive Investments and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Investments 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.

The idea behind Intuitive Investments Group and CATLIN GROUP 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.