Correlation Between Cepton and Thayer Ventures

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

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

Diversification Opportunities for Cepton and Thayer Ventures

0.0

Correlation Coefficient

Cepton  Thayer Ventures

Pay attention - limited upside

The 3 months correlation between Cepton and Thayer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc 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 Cepton 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 Cepton Inc 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 Cepton i.e., Cepton and Thayer Ventures go up and down completely randomly.

Pair Corralation between Cepton and Thayer Ventures

If you would invest  1.50  in Thayer Ventures Acquisition on November 28, 2024 and sell it today you would lose (0.13) from holding Thayer Ventures Acquisition or give up 8.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cepton Inc  vs.  Thayer Ventures Acquisition

Cepton Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cepton Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cepton is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Thayer Ventures Acqu

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thayer Ventures Acquisition are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Thayer Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cepton and Thayer Ventures

The main advantage of trading using opposite Cepton and Thayer Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton 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 Cepton Inc 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.