Correlation Between Tetragon Financial and FinecoBank SpA
Can any of the company-specific risk be diversified away by investing in both Tetragon Financial and FinecoBank SpA 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 FinecoBank SpA 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 FinecoBank SpA, you can compare the effects of market volatilities on Tetragon Financial and FinecoBank SpA 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 FinecoBank SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tetragon Financial and FinecoBank SpA.
Diversification Opportunities for Tetragon Financial and FinecoBank SpA
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tetragon and FinecoBank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group and FinecoBank SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinecoBank SpA 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 FinecoBank SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinecoBank SpA has no effect on the direction of Tetragon Financial i.e., Tetragon Financial and FinecoBank SpA go up and down completely randomly.
Pair Corralation between Tetragon Financial and FinecoBank SpA
Assuming the 90 days trading horizon Tetragon Financial Group is expected to generate 1.62 times more return on investment than FinecoBank SpA. However, Tetragon Financial is 1.62 times more volatile than FinecoBank SpA. It trades about 0.24 of its potential returns per unit of risk. FinecoBank SpA is currently generating about 0.3 per unit of risk. If you would invest 1,400 in Tetragon Financial Group on November 1, 2024 and sell it today you would earn a total of 145.00 from holding Tetragon Financial Group or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tetragon Financial Group vs. FinecoBank SpA
Performance |
| Timeline |
| Tetragon Financial |
| FinecoBank SpA |
Tetragon Financial and FinecoBank SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tetragon Financial and FinecoBank SpA
The main advantage of trading using opposite Tetragon Financial and FinecoBank SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tetragon Financial position performs unexpectedly, FinecoBank SpA 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 FinecoBank SpA will offset losses from the drop in FinecoBank SpA's long position.| Tetragon Financial vs. GoldMining | Tetragon Financial vs. Empire Metals Limited | Tetragon Financial vs. BW Offshore | Tetragon Financial vs. JB Hunt Transport |
| FinecoBank SpA vs. Adriatic Metals | FinecoBank SpA vs. Power Metal Resources | FinecoBank SpA vs. Allianz Technology Trust | FinecoBank SpA vs. Eneraqua Technologies PLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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