Correlation Between Thunder Bridge and Visa
Can any of the company-specific risk be diversified away by investing in both Thunder Bridge and Visa 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 Bridge and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thunder Bridge Capital and Visa Class A, you can compare the effects of market volatilities on Thunder Bridge and Visa 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 Bridge with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Bridge and Visa.
Diversification Opportunities for Thunder Bridge and Visa
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thunder and Visa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Bridge Capital and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A and Thunder Bridge 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 Bridge Capital are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Thunder Bridge i.e., Thunder Bridge and Visa go up and down completely randomly.
Pair Corralation between Thunder Bridge and Visa
Assuming the 90 days horizon Thunder Bridge Capital is expected to generate 144.25 times more return on investment than Visa. However, Thunder Bridge is 144.25 times more volatile than Visa Class A. It trades about 0.15 of its potential returns per unit of risk. Visa Class A is currently generating about 0.09 per unit of risk. If you would invest 12.00 in Thunder Bridge Capital on September 12, 2024 and sell it today you would earn a total of 237.00 from holding Thunder Bridge Capital or generate 1975.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 48.69% |
| Values | Daily Returns |
Thunder Bridge Capital vs. Visa Class A
Performance |
| Timeline |
| Thunder Bridge Capital |
| Visa Class A |
Thunder Bridge and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thunder Bridge and Visa
The main advantage of trading using opposite Thunder Bridge and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thunder Bridge position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| Thunder Bridge vs. HUMANA INC | Thunder Bridge vs. Barloworld Ltd ADR | Thunder Bridge vs. Morningstar Unconstrained Allocation | Thunder Bridge vs. Thrivent High Yield |
| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |