Correlation Between Western Union and Thunder Bridge
Can any of the company-specific risk be diversified away by investing in both Western Union 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 Western Union and Thunder Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Thunder Bridge Capital, you can compare the effects of market volatilities on Western Union 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 Western Union with a short position of Thunder Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Thunder Bridge.
Diversification Opportunities for Western Union and Thunder Bridge
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Thunder is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co 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 Western Union 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 Western Union Co 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 Western Union i.e., Western Union and Thunder Bridge go up and down completely randomly.
Pair Corralation between Western Union and Thunder Bridge
Allowing for the 90-day total investment horizon Western Union is expected to generate 1.92 times less return on investment than Thunder Bridge. But when comparing it to its historical volatility, Western Union Co is 1.27 times less risky than Thunder Bridge. It trades about 0.08 of its potential returns per unit of risk. Thunder Bridge Capital is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,060 in Thunder Bridge Capital on August 30, 2024 and sell it today you would earn a total of 36.00 from holding Thunder Bridge Capital or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Western Union Co vs. Thunder Bridge Capital
Performance |
| Timeline |
| Western Union |
| Thunder Bridge Capital |
Western Union and Thunder Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Thunder Bridge
The main advantage of trading using opposite Western Union and Thunder Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union 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.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
| Thunder Bridge vs. Four Leaf Acquisition | Thunder Bridge vs. WinVest Acquisition Corp | Thunder Bridge vs. SK Growth Opportunities | Thunder Bridge vs. Pearl Holdings Acquisition |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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