Correlation Between Kendrion and Tetragon Financial
Can any of the company-specific risk be diversified away by investing in both Kendrion 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 Kendrion and Tetragon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kendrion NV and Tetragon Financial Group, you can compare the effects of market volatilities on Kendrion 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 Kendrion with a short position of Tetragon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kendrion and Tetragon Financial.
Diversification Opportunities for Kendrion and Tetragon Financial
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kendrion and Tetragon is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kendrion NV and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon Financial and Kendrion 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 Kendrion NV 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 Kendrion i.e., Kendrion and Tetragon Financial go up and down completely randomly.
Pair Corralation between Kendrion and Tetragon Financial
Assuming the 90 days trading horizon Kendrion NV is expected to under-perform the Tetragon Financial. In addition to that, Kendrion is 1.3 times more volatile than Tetragon Financial Group. It trades about -0.03 of its total potential returns per unit of risk. Tetragon Financial Group is currently generating about 0.06 per unit of volatility. If you would invest 951.00 in Tetragon Financial Group on August 24, 2024 and sell it today you would earn a total of 329.00 from holding Tetragon Financial Group or generate 34.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.5% |
| Values | Daily Returns |
Kendrion NV vs. Tetragon Financial Group
Performance |
| Timeline |
| Kendrion NV |
| Tetragon Financial |
Kendrion and Tetragon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kendrion and Tetragon Financial
The main advantage of trading using opposite Kendrion and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kendrion 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.| Kendrion vs. TKH Group NV | Kendrion vs. NV Nederlandsche Apparatenfabriek | Kendrion vs. Brunel International NV | Kendrion vs. Aalberts Industries NV |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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