Correlation Between Argo Group and Tetragon Financial
Can any of the company-specific risk be diversified away by investing in both Argo Group 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 Argo Group and Tetragon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Group Limited and Tetragon Financial Group, you can compare the effects of market volatilities on Argo Group 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 Argo Group with a short position of Tetragon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and Tetragon Financial.
Diversification Opportunities for Argo Group and Tetragon Financial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Argo and Tetragon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group Limited and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon Financial and Argo 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 Argo Group Limited 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 Argo Group i.e., Argo Group and Tetragon Financial go up and down completely randomly.
Pair Corralation between Argo Group and Tetragon Financial
Assuming the 90 days trading horizon Argo Group Limited is expected to generate 1.34 times more return on investment than Tetragon Financial. However, Argo Group is 1.34 times more volatile than Tetragon Financial Group. It trades about 0.22 of its potential returns per unit of risk. Tetragon Financial Group is currently generating about 0.23 per unit of risk. If you would invest 400.00 in Argo Group Limited on November 1, 2024 and sell it today you would earn a total of 50.00 from holding Argo Group Limited or generate 12.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Argo Group Limited vs. Tetragon Financial Group
Performance |
Timeline |
Argo Group Limited |
Tetragon Financial |
Argo Group and Tetragon Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Argo Group and Tetragon Financial
The main advantage of trading using opposite Argo Group and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Group 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.Argo Group vs. Coor Service Management | Argo Group vs. Flow Traders NV | Argo Group vs. Alaska Air Group | Argo Group vs. Auto Trader Group |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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