Correlation Between Thunder Power and Sight Sciences
Can any of the company-specific risk be diversified away by investing in both Thunder Power and Sight Sciences 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 Thunder Power and Sight Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thunder Power Holdings, and Sight Sciences, you can compare the effects of market volatilities on Thunder Power and Sight Sciences 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 Thunder Power with a short position of Sight Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Power and Sight Sciences.
Diversification Opportunities for Thunder Power and Sight Sciences
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thunder and Sight is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Power Holdings, and Sight Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sight Sciences and Thunder Power 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 Thunder Power Holdings, are associated (or correlated) with Sight Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sight Sciences has no effect on the direction of Thunder Power i.e., Thunder Power and Sight Sciences go up and down completely randomly.
Pair Corralation between Thunder Power and Sight Sciences
Given the investment horizon of 90 days Thunder Power Holdings, is expected to generate 1.32 times more return on investment than Sight Sciences. However, Thunder Power is 1.32 times more volatile than Sight Sciences. It trades about -0.14 of its potential returns per unit of risk. Sight Sciences is currently generating about -0.24 per unit of risk. If you would invest 35.00 in Thunder Power Holdings, on August 28, 2024 and sell it today you would lose (8.00) from holding Thunder Power Holdings, or give up 22.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thunder Power Holdings, vs. Sight Sciences
Performance |
| Timeline |
| Thunder Power Holdings, |
| Sight Sciences |
Thunder Power and Sight Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thunder Power and Sight Sciences
The main advantage of trading using opposite Thunder Power and Sight Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thunder Power position performs unexpectedly, Sight Sciences 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 Sight Sciences will offset losses from the drop in Sight Sciences' long position.| Thunder Power vs. Emerson Radio | Thunder Power vs. IPG Photonics | Thunder Power vs. Playtika Holding Corp | Thunder Power vs. Arrow Electronics |
| Sight Sciences vs. Si Bone | Sight Sciences vs. Rapid Micro Biosystems | Sight Sciences vs. Tactile Systems Technology | Sight Sciences vs. Pulmonx Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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