Correlation Between Tetragon Financial and Spire Healthcare
Can any of the company-specific risk be diversified away by investing in both Tetragon Financial and Spire Healthcare 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 Spire Healthcare 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 Spire Healthcare Group, you can compare the effects of market volatilities on Tetragon Financial and Spire Healthcare 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 Spire Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tetragon Financial and Spire Healthcare.
Diversification Opportunities for Tetragon Financial and Spire Healthcare
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tetragon and Spire is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare 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 Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of Tetragon Financial i.e., Tetragon Financial and Spire Healthcare go up and down completely randomly.
Pair Corralation between Tetragon Financial and Spire Healthcare
Assuming the 90 days trading horizon Tetragon Financial Group is expected to generate 0.76 times more return on investment than Spire Healthcare. However, Tetragon Financial Group is 1.32 times less risky than Spire Healthcare. It trades about 0.13 of its potential returns per unit of risk. Spire Healthcare Group is currently generating about 0.0 per unit of risk. If you would invest 908.00 in Tetragon Financial Group on October 26, 2024 and sell it today you would earn a total of 717.00 from holding Tetragon Financial Group or generate 78.96% 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. Spire Healthcare Group
Performance |
| Timeline |
| Tetragon Financial |
| Spire Healthcare |
Tetragon Financial and Spire Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tetragon Financial and Spire Healthcare
The main advantage of trading using opposite Tetragon Financial and Spire Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tetragon Financial position performs unexpectedly, Spire Healthcare 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 Spire Healthcare will offset losses from the drop in Spire Healthcare's long position.| Tetragon Financial vs. Dairy Farm International | Tetragon Financial vs. Molson Coors Beverage | Tetragon Financial vs. JD Sports Fashion | Tetragon Financial vs. Auto Trader Group |
| Spire Healthcare vs. Zegona Communications Plc | Spire Healthcare vs. Spirent Communications plc | Spire Healthcare vs. Batm Advanced Communications | Spire Healthcare vs. Monster Beverage Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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