Correlation Between NYSE Composite and Thunder Bridge
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Thunder Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Thunder Bridge Capital, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Thunder Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Thunder Bridge.
Diversification Opportunities for NYSE Composite and Thunder Bridge
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Thunder is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Thunder Bridge go up and down completely randomly.
Pair Corralation between NYSE Composite and Thunder Bridge
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.17 times more return on investment than Thunder Bridge. However, NYSE Composite is 1.17 times more volatile than Thunder Bridge Capital. It trades about 0.08 of its potential returns per unit of risk. Thunder Bridge Capital is currently generating about 0.04 per unit of risk. If you would invest 1,529,105 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 491,877 from holding NYSE Composite or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.11% |
| Values | Daily Returns |
NYSE Composite vs. Thunder Bridge Capital
Performance |
| Timeline |
NYSE Composite and Thunder Bridge Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with NYSE Composite and Thunder Bridge
The main advantage of trading using opposite NYSE Composite and Thunder Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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