Correlation Between Tetragon Financial and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Tetragon Financial and Golden Metal 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 Golden Metal 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 Golden Metal Resources, you can compare the effects of market volatilities on Tetragon Financial and Golden Metal 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 Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tetragon Financial and Golden Metal.
Diversification Opportunities for Tetragon Financial and Golden Metal
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tetragon and Golden is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources 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 Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Tetragon Financial i.e., Tetragon Financial and Golden Metal go up and down completely randomly.
Pair Corralation between Tetragon Financial and Golden Metal
Assuming the 90 days trading horizon Tetragon Financial is expected to generate 1.36 times less return on investment than Golden Metal. But when comparing it to its historical volatility, Tetragon Financial Group is 1.55 times less risky than Golden Metal. It trades about 0.23 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,900 in Golden Metal Resources on November 2, 2024 and sell it today you would earn a total of 400.00 from holding Golden Metal Resources or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tetragon Financial Group vs. Golden Metal Resources
Performance |
| Timeline |
| Tetragon Financial |
| Golden Metal Resources |
Tetragon Financial and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tetragon Financial and Golden Metal
The main advantage of trading using opposite Tetragon Financial and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tetragon Financial position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's long position.| Tetragon Financial vs. SupplyMe Capital PLC | Tetragon Financial vs. Premier African Minerals | Tetragon Financial vs. SANTANDER UK 8 | Tetragon Financial vs. Tower Resources plc |
| Golden Metal vs. Ryanair Holdings plc | Golden Metal vs. Ross Stores | Golden Metal vs. Spirent Communications plc | Golden Metal vs. Zoom Video Communications |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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