Correlation Between Seche Environnement and Tetragon Financial
Can any of the company-specific risk be diversified away by investing in both Seche Environnement and Tetragon Financial 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 Seche Environnement and Tetragon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seche Environnement SA and Tetragon Financial Group, you can compare the effects of market volatilities on Seche Environnement and Tetragon Financial 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 Seche Environnement with a short position of Tetragon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and Tetragon Financial.
Diversification Opportunities for Seche Environnement and Tetragon Financial
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seche and Tetragon is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon Financial and Seche Environnement 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 Seche Environnement SA are associated (or correlated) with Tetragon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tetragon Financial has no effect on the direction of Seche Environnement i.e., Seche Environnement and Tetragon Financial go up and down completely randomly.
Pair Corralation between Seche Environnement and Tetragon Financial
Assuming the 90 days trading horizon Seche Environnement is expected to generate 1.42 times less return on investment than Tetragon Financial. In addition to that, Seche Environnement is 1.25 times more volatile than Tetragon Financial Group. It trades about 0.15 of its total potential returns per unit of risk. Tetragon Financial Group is currently generating about 0.26 per unit of volatility. If you would invest 1,395 in Tetragon Financial Group on November 6, 2024 and sell it today you would earn a total of 155.00 from holding Tetragon Financial Group or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Seche Environnement SA vs. Tetragon Financial Group
Performance |
| Timeline |
| Seche Environnement |
| Tetragon Financial |
Seche Environnement and Tetragon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnement and Tetragon Financial
The main advantage of trading using opposite Seche Environnement and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement position performs unexpectedly, Tetragon Financial 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 Tetragon Financial will offset losses from the drop in Tetragon Financial's long position.| Seche Environnement vs. Telecom Italia SpA | Seche Environnement vs. Iron Mountain | Seche Environnement vs. Geely Automobile Holdings | Seche Environnement vs. Zoom Video Communications |
| Tetragon Financial vs. Quadrise Plc | Tetragon Financial vs. ImmuPharma PLC | Tetragon Financial vs. Intuitive Investments Group | Tetragon Financial vs. European Metals Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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