Correlation Between Tatton Asset and Taylor Maritime

Can any of the company-specific risk be diversified away by investing in both Tatton Asset and Taylor Maritime 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 Taylor Maritime 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 Taylor Maritime Investments, you can compare the effects of market volatilities on Tatton Asset and Taylor Maritime 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 Taylor Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tatton Asset and Taylor Maritime.

Diversification Opportunities for Tatton Asset and Taylor Maritime

0.62

Correlation Coefficient

Tatton Asset  Taylor Maritime

Poor diversification

The 3 months correlation between Tatton and Taylor is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tatton Asset Management and Taylor Maritime Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taylor Maritime Inve 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 Taylor Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taylor Maritime Inve has no effect on the direction of Tatton Asset i.e., Tatton Asset and Taylor Maritime go up and down completely randomly.

Pair Corralation between Tatton Asset and Taylor Maritime

Assuming the 90 days trading horizon Tatton Asset Management is expected to generate 1.01 times more return on investment than Taylor Maritime. However, Tatton Asset is 1.01 times more volatile than Taylor Maritime Investments. It trades about -0.06 of its potential returns per unit of risk. Taylor Maritime Investments is currently generating about -0.22 per unit of risk. If you would invest  66,400  in Tatton Asset Management on December 4, 2024 and sell it today you would lose (1,800) from holding Tatton Asset Management or give up 2.71% of portfolio value over 90 days.

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

Tatton Asset Management  vs.  Taylor Maritime Investments

Tatton Asset Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tatton Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Tatton Asset is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Taylor Maritime Inve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taylor Maritime Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Tatton Asset and Taylor Maritime

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

The idea behind Tatton Asset Management and Taylor Maritime Investments 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.