Correlation Between Synthomer Plc and Tatton Asset
Can any of the company-specific risk be diversified away by investing in both Synthomer Plc and Tatton Asset 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 Synthomer Plc and Tatton Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synthomer plc and Tatton Asset Management, you can compare the effects of market volatilities on Synthomer Plc and Tatton Asset 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 Synthomer Plc with a short position of Tatton Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and Tatton Asset.
Diversification Opportunities for Synthomer Plc and Tatton Asset
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Synthomer and Tatton is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer plc and Tatton Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tatton Asset Management and Synthomer Plc 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 Synthomer plc are associated (or correlated) with Tatton Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tatton Asset Management has no effect on the direction of Synthomer Plc i.e., Synthomer Plc and Tatton Asset go up and down completely randomly.
Pair Corralation between Synthomer Plc and Tatton Asset
Assuming the 90 days trading horizon Synthomer plc is expected to under-perform the Tatton Asset. In addition to that, Synthomer Plc is 2.23 times more volatile than Tatton Asset Management. It trades about -0.01 of its total potential returns per unit of risk. Tatton Asset Management is currently generating about 0.08 per unit of volatility. If you would invest 47,951 in Tatton Asset Management on September 26, 2024 and sell it today you would earn a total of 22,049 from holding Tatton Asset Management or generate 45.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synthomer plc vs. Tatton Asset Management
Performance |
| Timeline |
| Synthomer plc |
| Tatton Asset Management |
Synthomer Plc and Tatton Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthomer Plc and Tatton Asset
The main advantage of trading using opposite Synthomer Plc and Tatton Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthomer Plc position performs unexpectedly, Tatton Asset 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 Tatton Asset will offset losses from the drop in Tatton Asset's long position.| Synthomer Plc vs. BW Offshore | Synthomer Plc vs. Bloomsbury Publishing Plc | Synthomer Plc vs. Axfood AB | Synthomer Plc vs. Taiwan Semiconductor Manufacturing |
| Tatton Asset vs. UNIQA Insurance Group | Tatton Asset vs. Synthomer plc | Tatton Asset vs. National Bank of | Tatton Asset vs. Taiwan Semiconductor Manufacturing |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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