Correlation Between Biofrontera Warrants and Thayer Ventures

Can any of the company-specific risk be diversified away by investing in both Biofrontera Warrants 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 Biofrontera Warrants and Thayer Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Biofrontera Warrants and Thayer Ventures Acquisition, you can compare the effects of market volatilities on Biofrontera Warrants 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 Biofrontera Warrants with a short position of Thayer Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofrontera Warrants and Thayer Ventures.

Diversification Opportunities for Biofrontera Warrants and Thayer Ventures

-0.4

Correlation Coefficient

Biofrontera Warrants  Thayer Ventures

Very good diversification

The 3 months correlation between Biofrontera and Thayer is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Biofrontera Warrants 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 Biofrontera Warrants 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 Biofrontera Warrants 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 Biofrontera Warrants i.e., Biofrontera Warrants and Thayer Ventures go up and down completely randomly.

Pair Corralation between Biofrontera Warrants and Thayer Ventures

Assuming the 90 days horizon Biofrontera Warrants is expected to generate 5.52 times more return on investment than Thayer Ventures. However, Biofrontera Warrants is 5.52 times more volatile than Thayer Ventures Acquisition. It trades about 0.14 of its potential returns per unit of risk. Thayer Ventures Acquisition is currently generating about 0.07 per unit of risk. If you would invest  20.00  in Biofrontera Warrants on September 20, 2024 and sell it today you would lose (9.11) from holding Biofrontera Warrants or give up 45.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	64.92%
Values	Daily Returns

Biofrontera Warrants  vs.  Thayer Ventures Acquisition

Biofrontera Warrants

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biofrontera Warrants are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, Biofrontera Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Thayer Ventures Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thayer Ventures Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Biofrontera Warrants and Thayer Ventures

The main advantage of trading using opposite Biofrontera Warrants and Thayer Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofrontera Warrants 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 Biofrontera Warrants 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.