Correlation Between Athena Technology and Thunder Bridge

Can any of the company-specific risk be diversified away by investing in both Athena Technology 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 Athena Technology and Thunder Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Athena Technology Acquisition and Thunder Bridge Capital, you can compare the effects of market volatilities on Athena Technology 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 Athena Technology with a short position of Thunder Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athena Technology and Thunder Bridge.

Diversification Opportunities for Athena Technology and Thunder Bridge

-0.8

Correlation Coefficient

Athena Technology  Thunder Bridge

Pay attention - limited upside

The 3 months correlation between Athena and Thunder is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Athena Technology Acquisition 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 Athena Technology 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 Athena Technology Acquisition 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 Athena Technology i.e., Athena Technology and Thunder Bridge go up and down completely randomly.

Pair Corralation between Athena Technology and Thunder Bridge

Given the investment horizon of 90 days Athena Technology Acquisition is expected to under-perform the Thunder Bridge. In addition to that, Athena Technology is 2.42 times more volatile than Thunder Bridge Capital. It trades about -0.23 of its total potential returns per unit of risk. Thunder Bridge Capital is currently generating about 0.14 per unit of volatility. If you would invest  1,119  in Thunder Bridge Capital on September 25, 2024 and sell it today you would earn a total of  123.00  from holding Thunder Bridge Capital or generate 10.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	60.0%
Values	Daily Returns

Athena Technology Acquisition  vs.  Thunder Bridge Capital

Athena Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athena Technology Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Thunder Bridge Capital

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Thunder Bridge Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively inconsistent basic indicators, Thunder Bridge unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Athena Technology and Thunder Bridge

The main advantage of trading using opposite Athena Technology and Thunder Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athena Technology 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.

The idea behind Athena Technology Acquisition and Thunder Bridge Capital 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.