Correlation Between Tetragon Financial and Erste Group
Can any of the company-specific risk be diversified away by investing in both Tetragon Financial and Erste Group 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 Erste Group 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 Erste Group Bank, you can compare the effects of market volatilities on Tetragon Financial and Erste Group 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 Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tetragon Financial and Erste Group.
Diversification Opportunities for Tetragon Financial and Erste Group
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tetragon and Erste is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank 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 Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Tetragon Financial i.e., Tetragon Financial and Erste Group go up and down completely randomly.
Pair Corralation between Tetragon Financial and Erste Group
Assuming the 90 days trading horizon Tetragon Financial Group is expected to generate 1.73 times more return on investment than Erste Group. However, Tetragon Financial is 1.73 times more volatile than Erste Group Bank. It trades about 0.45 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.25 per unit of risk. If you would invest 1,410 in Tetragon Financial Group on October 25, 2024 and sell it today you would earn a total of 240.00 from holding Tetragon Financial Group or generate 17.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tetragon Financial Group vs. Erste Group Bank
Performance |
| Timeline |
| Tetragon Financial |
| Erste Group Bank |
Tetragon Financial and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tetragon Financial and Erste Group
The main advantage of trading using opposite Tetragon Financial and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tetragon Financial position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| Tetragon Financial vs. Griffin Mining | Tetragon Financial vs. Pan American Silver | Tetragon Financial vs. Summit Materials Cl | Tetragon Financial vs. Atalaya Mining |
| Erste Group vs. Manulife Financial Corp | Erste Group vs. Atalaya Mining | Erste Group vs. Bisichi Mining PLC | Erste Group vs. St Galler Kantonalbank |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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