Correlation Between Tatton Asset and Technicolor
Can any of the company-specific risk be diversified away by investing in both Tatton Asset and Technicolor 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 Tatton Asset and Technicolor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tatton Asset Management and Technicolor, you can compare the effects of market volatilities on Tatton Asset and Technicolor 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 Tatton Asset with a short position of Technicolor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tatton Asset and Technicolor.
Diversification Opportunities for Tatton Asset and Technicolor
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tatton and Technicolor is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tatton Asset Management and Technicolor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technicolor and Tatton Asset 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 Tatton Asset Management are associated (or correlated) with Technicolor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technicolor has no effect on the direction of Tatton Asset i.e., Tatton Asset and Technicolor go up and down completely randomly.
Pair Corralation between Tatton Asset and Technicolor
Assuming the 90 days trading horizon Tatton Asset is expected to generate 6.47 times less return on investment than Technicolor. But when comparing it to its historical volatility, Tatton Asset Management is 2.04 times less risky than Technicolor. It trades about 0.04 of its potential returns per unit of risk. Technicolor is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Technicolor on October 11, 2024 and sell it today you would earn a total of 1.00 from holding Technicolor or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tatton Asset Management vs. Technicolor
Performance |
| Timeline |
| Tatton Asset Management |
| Technicolor |
Tatton Asset and Technicolor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tatton Asset and Technicolor
The main advantage of trading using opposite Tatton Asset and Technicolor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tatton Asset position performs unexpectedly, Technicolor 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 Technicolor will offset losses from the drop in Technicolor's long position.| Tatton Asset vs. Eco Animal Health | Tatton Asset vs. STMicroelectronics NV | Tatton Asset vs. Cardinal Health | Tatton Asset vs. Compal Electronics GDR |
| Technicolor vs. Tatton Asset Management | Technicolor vs. Auction Technology Group | Technicolor vs. EJF Investments | Technicolor vs. Herald Investment Trust |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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