Correlation Between Tetragon Financial and JPMorgan Japanese

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

Diversification Opportunities for Tetragon Financial and JPMorgan Japanese

0.52

Correlation Coefficient

Tetragon Financial  JPMorgan Japanese

Very weak diversification

The 3 months correlation between Tetragon and JPMorgan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group and JPMorgan Japanese Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Japanese 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 JPMorgan Japanese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Japanese has no effect on the direction of Tetragon Financial i.e., Tetragon Financial and JPMorgan Japanese go up and down completely randomly.

Pair Corralation between Tetragon Financial and JPMorgan Japanese

Assuming the 90 days trading horizon Tetragon Financial Group is expected to generate 0.83 times more return on investment than JPMorgan Japanese. However, Tetragon Financial Group is 1.2 times less risky than JPMorgan Japanese. It trades about 0.11 of its potential returns per unit of risk. JPMorgan Japanese Investment is currently generating about 0.04 per unit of risk. If you would invest  895.00  in Tetragon Financial Group on October 11, 2024 and sell it today you would earn a total of  535.00  from holding Tetragon Financial Group or generate 59.78% return on investment over 90 days.

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

Tetragon Financial Group  vs.  JPMorgan Japanese Investment

Tetragon Financial

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tetragon Financial Group are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Tetragon Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

JPMorgan Japanese

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Japanese Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, JPMorgan Japanese is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Tetragon Financial and JPMorgan Japanese

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

The idea behind Tetragon Financial Group and JPMorgan Japanese Investment 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.