Correlation Between CATLIN GROUP and CD PROJEKT

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

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

Diversification Opportunities for CATLIN GROUP and CD PROJEKT

-0.71

Correlation Coefficient

CATLIN GROUP  CD PROJEKT

Pay attention - limited upside

The 3 months correlation between CATLIN and 0LX1 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and CD PROJEKT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD PROJEKT SA 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 CD PROJEKT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD PROJEKT SA has no effect on the direction of CATLIN GROUP i.e., CATLIN GROUP and CD PROJEKT go up and down completely randomly.

Pair Corralation between CATLIN GROUP and CD PROJEKT

Assuming the 90 days trading horizon CATLIN GROUP is expected to under-perform the CD PROJEKT. In addition to that, CATLIN GROUP is 6.03 times more volatile than CD PROJEKT SA. It trades about -0.06 of its total potential returns per unit of risk. CD PROJEKT SA is currently generating about 0.13 per unit of volatility. If you would invest  9,800  in CD PROJEKT SA on April 22, 2025 and sell it today you would earn a total of  100.00  from holding CD PROJEKT SA or generate 1.02% return on investment over 90 days.

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

CATLIN GROUP   vs.  CD PROJEKT SA

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.

CD PROJEKT SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CD PROJEKT SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CD PROJEKT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CATLIN GROUP and CD PROJEKT

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

The idea behind CATLIN GROUP and CD PROJEKT SA 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.