Correlation Between IShares Property and Tetragon Financial

Can any of the company-specific risk be diversified away by investing in both IShares Property and Tetragon Financial 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 IShares Property and Tetragon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Property Yield and Tetragon Financial Group, you can compare the effects of market volatilities on IShares Property and Tetragon Financial 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 IShares Property with a short position of Tetragon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Property and Tetragon Financial.

Diversification Opportunities for IShares Property and Tetragon Financial

0.17

Correlation Coefficient

IShares Property  Tetragon Financial

Average diversification

The 3 months correlation between IShares and Tetragon is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding iShares Property Yield and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon Financial and IShares Property 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 iShares Property Yield are associated (or correlated) with Tetragon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tetragon Financial has no effect on the direction of IShares Property i.e., IShares Property and Tetragon Financial go up and down completely randomly.

Pair Corralation between IShares Property and Tetragon Financial

Assuming the 90 days trading horizon IShares Property is expected to generate 2.75 times less return on investment than Tetragon Financial. But when comparing it to its historical volatility, iShares Property Yield is 2.46 times less risky than Tetragon Financial. It trades about 0.12 of its potential returns per unit of risk. Tetragon Financial Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,025  in Tetragon Financial Group on October 7, 2024 and sell it today you would earn a total of  385.00  from holding Tetragon Financial Group or generate 37.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.13%
Values	Daily Returns

iShares Property Yield  vs.  Tetragon Financial Group

iShares Property Yield

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Property Yield are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares Property is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Tetragon Financial

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tetragon Financial Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Tetragon Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Property and Tetragon Financial

The main advantage of trading using opposite IShares Property and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Property position performs unexpectedly, Tetragon Financial 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 Tetragon Financial will offset losses from the drop in Tetragon Financial's long position.

The idea behind iShares Property Yield and Tetragon Financial Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.