Correlation Between Tetragon Financial and Broadcom

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

Diversification Opportunities for Tetragon Financial and Broadcom

-0.08

Correlation Coefficient

Tetragon Financial  Broadcom

Good diversification

The 3 months correlation between Tetragon and Broadcom is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group and Broadcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadcom 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 Broadcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadcom has no effect on the direction of Tetragon Financial i.e., Tetragon Financial and Broadcom go up and down completely randomly.

Pair Corralation between Tetragon Financial and Broadcom

Assuming the 90 days trading horizon Tetragon Financial Group is expected to generate 0.38 times more return on investment than Broadcom. However, Tetragon Financial Group is 2.6 times less risky than Broadcom. It trades about 0.07 of its potential returns per unit of risk. Broadcom is currently generating about -0.08 per unit of risk. If you would invest  1,400  in Tetragon Financial Group on December 25, 2024 and sell it today you would earn a total of  85.00  from holding Tetragon Financial Group or generate 6.07% return on investment over 90 days.

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

Tetragon Financial Group  vs.  Broadcom

Tetragon Financial

Risk-Adjusted Performance

Modest

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

Broadcom

Risk-Adjusted Performance

Very Weak

Over the last 90 days Broadcom 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Tetragon Financial and Broadcom

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

The idea behind Tetragon Financial Group and Broadcom 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.