Correlation Between Tatton Asset and Fair Oaks
Can any of the company-specific risk be diversified away by investing in both Tatton Asset and Fair Oaks 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 Fair Oaks 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 Fair Oaks Income, you can compare the effects of market volatilities on Tatton Asset and Fair Oaks 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 Fair Oaks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tatton Asset and Fair Oaks.
Diversification Opportunities for Tatton Asset and Fair Oaks
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tatton and Fair is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tatton Asset Management and Fair Oaks Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Oaks Income 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 Fair Oaks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Oaks Income has no effect on the direction of Tatton Asset i.e., Tatton Asset and Fair Oaks go up and down completely randomly.
Pair Corralation between Tatton Asset and Fair Oaks
Assuming the 90 days trading horizon Tatton Asset Management is expected to under-perform the Fair Oaks. In addition to that, Tatton Asset is 1.28 times more volatile than Fair Oaks Income. It trades about -0.24 of its total potential returns per unit of risk. Fair Oaks Income is currently generating about 0.12 per unit of volatility. If you would invest 55.00 in Fair Oaks Income on December 8, 2024 and sell it today you would earn a total of 2.00 from holding Fair Oaks Income or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tatton Asset Management vs. Fair Oaks Income
Performance |
| Timeline |
| Tatton Asset Management |
| Fair Oaks Income |
Tatton Asset and Fair Oaks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tatton Asset and Fair Oaks
The main advantage of trading using opposite Tatton Asset and Fair Oaks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tatton Asset position performs unexpectedly, Fair Oaks 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 Fair Oaks will offset losses from the drop in Fair Oaks' long position.| Tatton Asset vs. Blackrock World Mining | ||
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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