Correlation Between Fastned BV and Tetragon Financial

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

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

Diversification Opportunities for Fastned BV and Tetragon Financial

0.65

Correlation Coefficient

Fastned BV  Tetragon Financial

Poor diversification

The 3 months correlation between Fastned and Tetragon is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fastned BV and Tetragon Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetragon Financial and Fastned BV 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 Fastned BV 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 Fastned BV i.e., Fastned BV and Tetragon Financial go up and down completely randomly.

Pair Corralation between Fastned BV and Tetragon Financial

Assuming the 90 days trading horizon Fastned BV is expected to generate 1.13 times less return on investment than Tetragon Financial. In addition to that, Fastned BV is 1.58 times more volatile than Tetragon Financial Group. It trades about 0.11 of its total potential returns per unit of risk. Tetragon Financial Group is currently generating about 0.19 per unit of volatility. If you would invest  1,387  in Tetragon Financial Group on April 20, 2025 and sell it today you would earn a total of  318.00  from holding Tetragon Financial Group or generate 22.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

Fastned BV  vs.  Tetragon Financial Group

Fastned BV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fastned BV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fastned BV unveiled solid returns over the last few months and may actually be approaching a breakup point.

Tetragon Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tetragon Financial Group are ranked lower than 14 (%) 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 Fastned BV and Tetragon Financial

The main advantage of trading using opposite Fastned BV and Tetragon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fastned BV 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 Fastned BV 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.