Correlation Between Schroders Investment and Tetragon Financial
Can any of the company-specific risk be diversified away by investing in both Schroders Investment 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 Schroders Investment and Tetragon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schroders Investment Trusts and Tetragon Financial Group, you can compare the effects of market volatilities on Schroders Investment 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 Schroders Investment with a short position of Tetragon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schroders Investment and Tetragon Financial.
Diversification Opportunities for Schroders Investment and Tetragon Financial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Schroders and Tetragon is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Schroders Investment Trusts and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon Financial and Schroders Investment 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 Schroders Investment Trusts 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 Schroders Investment i.e., Schroders Investment and Tetragon Financial go up and down completely randomly.
Pair Corralation between Schroders Investment and Tetragon Financial
Assuming the 90 days trading horizon Schroders Investment is expected to generate 8.8 times less return on investment than Tetragon Financial. But when comparing it to its historical volatility, Schroders Investment Trusts is 2.36 times less risky than Tetragon Financial. It trades about 0.07 of its potential returns per unit of risk. Tetragon Financial Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Schroders Investment Trusts vs. Tetragon Financial Group
Performance |
| Timeline |
| Schroders Investment |
| Tetragon Financial |
Schroders Investment and Tetragon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schroders Investment and Tetragon Financial
The main advantage of trading using opposite Schroders Investment and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schroders Investment 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.| Schroders Investment vs. Atalaya Mining | Schroders Investment vs. Eastinco Mining Exploration | Schroders Investment vs. Wizz Air Holdings | Schroders Investment vs. Coeur Mining |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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