Correlation Between VF and Thayer Ventures
Can any of the company-specific risk be diversified away by investing in both VF and Thayer Ventures 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 VF and Thayer Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VF Corporation and Thayer Ventures Acquisition, you can compare the effects of market volatilities on VF and Thayer Ventures 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 VF with a short position of Thayer Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of VF and Thayer Ventures.
Diversification Opportunities for VF and Thayer Ventures
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VF and Thayer is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and Thayer Ventures Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thayer Ventures Acqu and VF 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 VF Corporation are associated (or correlated) with Thayer Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thayer Ventures Acqu has no effect on the direction of VF i.e., VF and Thayer Ventures go up and down completely randomly.
Pair Corralation between VF and Thayer Ventures
Considering the 90-day investment horizon VF is expected to generate 21.55 times less return on investment than Thayer Ventures. But when comparing it to its historical volatility, VF Corporation is 6.34 times less risky than Thayer Ventures. It trades about 0.02 of its potential returns per unit of risk. Thayer Ventures Acquisition is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7.40 in Thayer Ventures Acquisition on August 31, 2024 and sell it today you would lose (5.95) from holding Thayer Ventures Acquisition or give up 80.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VF Corp. vs. Thayer Ventures Acquisition
Performance |
| Timeline |
| VF Corporation |
| Thayer Ventures Acqu |
VF and Thayer Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VF and Thayer Ventures
The main advantage of trading using opposite VF and Thayer Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VF position performs unexpectedly, Thayer Ventures 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 Thayer Ventures will offset losses from the drop in Thayer Ventures' long position.The idea behind VF Corporation and Thayer Ventures Acquisition 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.| Thayer Ventures vs. Inspirato | Thayer Ventures vs. Anghami De | Thayer Ventures vs. Cepton Inc | Thayer Ventures vs. Cepton 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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