Correlation Between Tetragon Financial and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Tetragon Financial and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on Tetragon Financial and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tetragon Financial and Gaztransport.
Diversification Opportunities for Tetragon Financial and Gaztransport
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tetragon and Gaztransport is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Tetragon Financial i.e., Tetragon Financial and Gaztransport go up and down completely randomly.
Pair Corralation between Tetragon Financial and Gaztransport
Assuming the 90 days trading horizon Tetragon Financial is expected to generate 10.78 times less return on investment than Gaztransport. But when comparing it to its historical volatility, Tetragon Financial Group is 3.36 times less risky than Gaztransport. It trades about 0.07 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 12,993 in Gaztransport et Technigaz on October 10, 2024 and sell it today you would earn a total of 1,017 from holding Gaztransport et Technigaz or generate 7.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tetragon Financial Group vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Tetragon Financial |
| Gaztransport et Technigaz |
Tetragon Financial and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tetragon Financial and Gaztransport
The main advantage of trading using opposite Tetragon Financial and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tetragon Financial position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| Tetragon Financial vs. AMG Advanced Metallurgical | Tetragon Financial vs. Gaztransport et Technigaz | Tetragon Financial vs. Capital Drilling | Tetragon Financial vs. Sovereign Metals |
| Gaztransport vs. BE Semiconductor Industries | Gaztransport vs. British American Tobacco | Gaztransport vs. American Homes 4 | Gaztransport vs. bet at home AG |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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