Correlation Between Coliseum Acquisition and Thunder Bridge
Can any of the company-specific risk be diversified away by investing in both Coliseum Acquisition and Thunder Bridge 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 Coliseum Acquisition and Thunder Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coliseum Acquisition Corp and Thunder Bridge Capital, you can compare the effects of market volatilities on Coliseum Acquisition and Thunder Bridge 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 Coliseum Acquisition with a short position of Thunder Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coliseum Acquisition and Thunder Bridge.
Diversification Opportunities for Coliseum Acquisition and Thunder Bridge
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coliseum and Thunder is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Coliseum Acquisition Corp and Thunder Bridge Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Bridge Capital and Coliseum Acquisition 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 Coliseum Acquisition Corp are associated (or correlated) with Thunder Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Bridge Capital has no effect on the direction of Coliseum Acquisition i.e., Coliseum Acquisition and Thunder Bridge go up and down completely randomly.
Pair Corralation between Coliseum Acquisition and Thunder Bridge
Assuming the 90 days horizon Coliseum Acquisition Corp is expected to generate 14.37 times more return on investment than Thunder Bridge. However, Coliseum Acquisition is 14.37 times more volatile than Thunder Bridge Capital. It trades about 0.15 of its potential returns per unit of risk. Thunder Bridge Capital is currently generating about 0.01 per unit of risk. If you would invest 3.22 in Coliseum Acquisition Corp on September 3, 2024 and sell it today you would earn a total of 7.78 from holding Coliseum Acquisition Corp or generate 241.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 43.27% |
| Values | Daily Returns |
Coliseum Acquisition Corp vs. Thunder Bridge Capital
Performance |
| Timeline |
| Coliseum Acquisition Corp |
| Thunder Bridge Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coliseum Acquisition and Thunder Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coliseum Acquisition and Thunder Bridge
The main advantage of trading using opposite Coliseum Acquisition and Thunder Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coliseum Acquisition position performs unexpectedly, Thunder Bridge 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 Thunder Bridge will offset losses from the drop in Thunder Bridge's long position.The idea behind Coliseum Acquisition Corp and Thunder Bridge Capital 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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