Correlation Between Xp and Thunder Bridge
Can any of the company-specific risk be diversified away by investing in both Xp 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 Xp and Thunder Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and Thunder Bridge Capital, you can compare the effects of market volatilities on Xp 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 Xp with a short position of Thunder Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Thunder Bridge.
Diversification Opportunities for Xp and Thunder Bridge
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xp and Thunder is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc 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 Xp 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 Xp Inc 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 Xp i.e., Xp and Thunder Bridge go up and down completely randomly.
Pair Corralation between Xp and Thunder Bridge
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the Thunder Bridge. In addition to that, Xp is 2.09 times more volatile than Thunder Bridge Capital. It trades about -0.27 of its total potential returns per unit of risk. Thunder Bridge Capital is currently generating about 0.12 per unit of volatility. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. Thunder Bridge Capital
Performance |
| Timeline |
| Xp Inc |
| Thunder Bridge Capital |
Xp and Thunder Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and Thunder Bridge
The main advantage of trading using opposite Xp and Thunder Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp 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.| Xp vs. Raymond James Financial | Xp vs. Selective Insurance Group | Xp vs. Reinsurance Group of | Xp vs. Houlihan Lokey |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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