Correlation Between Tetragon Financial and ASML Holding
Can any of the company-specific risk be diversified away by investing in both Tetragon Financial and ASML Holding 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 Tetragon Financial and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tetragon Financial Group and ASML Holding NV, you can compare the effects of market volatilities on Tetragon Financial and ASML Holding 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 Tetragon Financial with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tetragon Financial and ASML Holding.
Diversification Opportunities for Tetragon Financial and ASML Holding
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tetragon and ASML is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV and Tetragon Financial 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 Tetragon Financial Group are associated (or correlated) with ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of Tetragon Financial i.e., Tetragon Financial and ASML Holding go up and down completely randomly.
Pair Corralation between Tetragon Financial and ASML Holding
Assuming the 90 days trading horizon Tetragon Financial Group is expected to generate 0.67 times more return on investment than ASML Holding. However, Tetragon Financial Group is 1.49 times less risky than ASML Holding. It trades about 0.12 of its potential returns per unit of risk. ASML Holding NV is currently generating about -0.06 per unit of risk. If you would invest 1,230 in Tetragon Financial Group on August 24, 2024 and sell it today you would earn a total of 50.00 from holding Tetragon Financial Group or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tetragon Financial Group vs. ASML Holding NV
Performance |
| Timeline |
| Tetragon Financial |
| ASML Holding NV |
Tetragon Financial and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tetragon Financial and ASML Holding
The main advantage of trading using opposite Tetragon Financial and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tetragon Financial position performs unexpectedly, ASML Holding 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 ASML Holding will offset losses from the drop in ASML Holding's long position.The idea behind Tetragon Financial Group and ASML Holding NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ASML Holding vs. Adyen NV | ASML Holding vs. Prosus NV | ASML Holding vs. Koninklijke Philips NV | ASML Holding vs. Koninklijke Ahold Delhaize |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |