Correlation Between Ford and Tetragon Financial
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and Tetragon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Tetragon Financial Group, you can compare the effects of market volatilities on Ford 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 Ford with a short position of Tetragon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Tetragon Financial.
Diversification Opportunities for Ford and Tetragon Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Tetragon is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon Financial and Ford 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 Ford Motor 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 Ford i.e., Ford and Tetragon Financial go up and down completely randomly.
Pair Corralation between Ford and Tetragon Financial
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Tetragon Financial. In addition to that, Ford is 3.01 times more volatile than Tetragon Financial Group. It trades about -0.27 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 Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ford Motor vs. Tetragon Financial Group
Performance |
| Timeline |
| Ford Motor |
| Tetragon Financial |
Ford and Tetragon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Tetragon Financial
The main advantage of trading using opposite Ford and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.| Ford vs. Canoo Inc | Ford vs. Aquagold International | Ford vs. Morningstar Unconstrained Allocation | Ford vs. Thrivent High Yield |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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