Correlation Between RMG Acquisition and Thunder Bridge
Can any of the company-specific risk be diversified away by investing in both RMG 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 RMG 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 RMG Acquisition Corp and Thunder Bridge Capital, you can compare the effects of market volatilities on RMG 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 RMG Acquisition with a short position of Thunder Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMG Acquisition and Thunder Bridge.
Diversification Opportunities for RMG Acquisition and Thunder Bridge
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RMG and Thunder is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding RMG 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 RMG 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 RMG 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 RMG Acquisition i.e., RMG Acquisition and Thunder Bridge go up and down completely randomly.
Pair Corralation between RMG Acquisition and Thunder Bridge
Assuming the 90 days horizon RMG Acquisition Corp is expected to under-perform the Thunder Bridge. In addition to that, RMG Acquisition is 1.9 times more volatile than Thunder Bridge Capital. It trades about -0.01 of its total potential returns per unit of risk. Thunder Bridge Capital is currently generating about 0.04 per unit of volatility. If you would invest 1,006 in Thunder Bridge Capital on August 28, 2024 and sell it today you would earn a total of 36.00 from holding Thunder Bridge Capital or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 40.31% |
| Values | Daily Returns |
RMG Acquisition Corp vs. Thunder Bridge Capital
Performance |
| Timeline |
| RMG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Thunder Bridge Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
RMG Acquisition and Thunder Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMG Acquisition and Thunder Bridge
The main advantage of trading using opposite RMG Acquisition and Thunder Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMG 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.| RMG Acquisition vs. Summit Materials | RMG Acquisition vs. Barrick Gold Corp | RMG Acquisition vs. Mangazeya Mining | RMG Acquisition vs. Ihuman Inc |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |