Correlation Between Tetragon Financial and Pan American
Can any of the company-specific risk be diversified away by investing in both Tetragon Financial and Pan American 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 Pan American 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 Pan American Silver, you can compare the effects of market volatilities on Tetragon Financial and Pan American 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 Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tetragon Financial and Pan American.
Diversification Opportunities for Tetragon Financial and Pan American
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tetragon and Pan is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver 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 Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of Tetragon Financial i.e., Tetragon Financial and Pan American go up and down completely randomly.
Pair Corralation between Tetragon Financial and Pan American
Assuming the 90 days trading horizon Tetragon Financial Group is expected to generate 1.26 times more return on investment than Pan American. However, Tetragon Financial is 1.26 times more volatile than Pan American Silver. It trades about 0.4 of its potential returns per unit of risk. Pan American Silver is currently generating about 0.22 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 220.00 from holding Tetragon Financial Group or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Tetragon Financial Group vs. Pan American Silver
Performance |
| Timeline |
| Tetragon Financial |
| Pan American Silver |
Tetragon Financial and Pan American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tetragon Financial and Pan American
The main advantage of trading using opposite Tetragon Financial and Pan American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tetragon Financial position performs unexpectedly, Pan American 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 Pan American will offset losses from the drop in Pan American'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 |
| Pan American vs. Toyota Motor Corp | Pan American vs. SoftBank Group Corp | Pan American vs. OTP Bank Nyrt | Pan American vs. ONEOK Inc |
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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