Correlation Between Tatton Asset and Rosslyn Data

Can any of the company-specific risk be diversified away by investing in both Tatton Asset and Rosslyn Data 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 Tatton Asset and Rosslyn Data into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tatton Asset Management and Rosslyn Data Technologies, you can compare the effects of market volatilities on Tatton Asset and Rosslyn Data 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 Tatton Asset with a short position of Rosslyn Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tatton Asset and Rosslyn Data.

Diversification Opportunities for Tatton Asset and Rosslyn Data

-0.68

Correlation Coefficient

Tatton Asset  Rosslyn Data

Excellent diversification

The 3 months correlation between Tatton and Rosslyn is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Tatton Asset Management and Rosslyn Data Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rosslyn Data Technologies and Tatton Asset 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 Tatton Asset Management are associated (or correlated) with Rosslyn Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rosslyn Data Technologies has no effect on the direction of Tatton Asset i.e., Tatton Asset and Rosslyn Data go up and down completely randomly.

Pair Corralation between Tatton Asset and Rosslyn Data

Assuming the 90 days trading horizon Tatton Asset Management is expected to generate 1.19 times more return on investment than Rosslyn Data. However, Tatton Asset is 1.19 times more volatile than Rosslyn Data Technologies. It trades about 0.13 of its potential returns per unit of risk. Rosslyn Data Technologies is currently generating about -0.31 per unit of risk. If you would invest  67,400  in Tatton Asset Management on October 12, 2024 and sell it today you would earn a total of  2,400  from holding Tatton Asset Management or generate 3.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Tatton Asset Management  vs.  Rosslyn Data Technologies

Tatton Asset Management

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tatton Asset Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Tatton Asset may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Rosslyn Data Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rosslyn Data Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Tatton Asset and Rosslyn Data

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

The idea behind Tatton Asset Management and Rosslyn Data Technologies 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.