Correlation Between Tetragon Financial and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Tetragon Financial and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Tetragon Financial and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tetragon Financial and Auction Technology.
Diversification Opportunities for Tetragon Financial and Auction Technology
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tetragon and Auction is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Tetragon Financial i.e., Tetragon Financial and Auction Technology go up and down completely randomly.
Pair Corralation between Tetragon Financial and Auction Technology
Assuming the 90 days trading horizon Tetragon Financial Group is expected to generate 0.53 times more return on investment than Auction Technology. However, Tetragon Financial Group is 1.87 times less risky than Auction Technology. It trades about 0.34 of its potential returns per unit of risk. Auction Technology Group is currently generating about 0.16 per unit of risk. If you would invest 1,270 in Tetragon Financial Group on October 17, 2024 and sell it today you would earn a total of 310.00 from holding Tetragon Financial Group or generate 24.41% 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. Auction Technology Group
Performance |
| Timeline |
| Tetragon Financial |
| Auction Technology |
Tetragon Financial and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tetragon Financial and Auction Technology
The main advantage of trading using opposite Tetragon Financial and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tetragon Financial position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Tetragon Financial vs. SupplyMe Capital PLC | Tetragon Financial vs. SM Energy Co | Tetragon Financial vs. FuelCell Energy | Tetragon Financial vs. Grand Vision Media |
| Auction Technology vs. Cembra Money Bank | Auction Technology vs. Synchrony Financial | Auction Technology vs. UNIQA Insurance Group | Auction Technology vs. Tetragon Financial Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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