Correlation Between Tatton Asset and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Tatton Asset and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Tatton Asset and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tatton Asset and Auction Technology.
Diversification Opportunities for Tatton Asset and Auction Technology
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tatton and Auction is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tatton Asset Management and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Tatton Asset i.e., Tatton Asset and Auction Technology go up and down completely randomly.
Pair Corralation between Tatton Asset and Auction Technology
Assuming the 90 days trading horizon Tatton Asset Management is expected to generate 0.55 times more return on investment than Auction Technology. However, Tatton Asset Management is 1.81 times less risky than Auction Technology. It trades about 0.1 of its potential returns per unit of risk. Auction Technology Group is currently generating about 0.01 per unit of risk. If you would invest 43,007 in Tatton Asset Management on September 24, 2024 and sell it today you would earn a total of 25,993 from holding Tatton Asset Management or generate 60.44% 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. Auction Technology Group
Performance |
| Timeline |
| Tatton Asset Management |
| Auction Technology |
Tatton Asset and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tatton Asset and Auction Technology
The main advantage of trading using opposite Tatton Asset and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tatton Asset position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Tatton Asset vs. Samsung Electronics Co | Tatton Asset vs. Samsung Electronics Co | Tatton Asset vs. Hyundai Motor | Tatton Asset vs. Toyota Motor Corp |
| Auction Technology vs. Iron Mountain | Auction Technology vs. United States Steel | Auction Technology vs. Lowland Investment Co | Auction Technology vs. Central Asia Metals |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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