Correlation Between Astar and Tetragon Financial
Can any of the company-specific risk be diversified away by investing in both Astar 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 Astar and Tetragon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Tetragon Financial Group, you can compare the effects of market volatilities on Astar 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 Astar with a short position of Tetragon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Tetragon Financial.
Diversification Opportunities for Astar and Tetragon Financial
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Astar and Tetragon is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon Financial and Astar 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 Astar 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 Astar i.e., Astar and Tetragon Financial go up and down completely randomly.
Pair Corralation between Astar and Tetragon Financial
Assuming the 90 days trading horizon Astar is expected to under-perform the Tetragon Financial. In addition to that, Astar is 11.09 times more volatile than Tetragon Financial Group. It trades about -0.08 of its total potential returns per unit of risk. Tetragon Financial Group is currently generating about 0.07 per unit of volatility. If you would invest 1,420 in Tetragon Financial Group on October 10, 2024 and sell it today you would earn a total of 10.00 from holding Tetragon Financial Group or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Astar vs. Tetragon Financial Group
Performance |
| Timeline |
| Astar |
| Tetragon Financial |
Astar and Tetragon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Tetragon Financial
The main advantage of trading using opposite Astar and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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.The idea behind Astar and Tetragon Financial 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.| Tetragon Financial vs. AMG Advanced Metallurgical | Tetragon Financial vs. Gaztransport et Technigaz | Tetragon Financial vs. Capital Drilling | Tetragon Financial vs. Sovereign Metals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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