Correlation Between Enterprise and Thunder Bridge

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

By analyzing existing cross correlation between Enterprise 40 Technology and Thunder Bridge Capital, you can compare the effects of market volatilities on Enterprise 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 Enterprise with a short position of Thunder Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise and Thunder Bridge.

Diversification Opportunities for Enterprise and Thunder Bridge

0.56

Correlation Coefficient

Enterprise  Thunder Bridge

Very weak diversification

The 3 months correlation between Enterprise and Thunder is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise 40 Technology 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 Enterprise 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 Enterprise 40 Technology 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 Enterprise i.e., Enterprise and Thunder Bridge go up and down completely randomly.

Pair Corralation between Enterprise and Thunder Bridge

If you would invest  1,119  in Thunder Bridge Capital on September 21, 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 Together
Strength	Weak
Accuracy	6.67%
Values	Daily Returns

Enterprise 40 Technology  vs.  Thunder Bridge Capital

Enterprise 40 Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enterprise 40 Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Enterprise is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 abnormal basic indicators, Thunder Bridge unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enterprise and Thunder Bridge

The main advantage of trading using opposite Enterprise and Thunder Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise 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 Enterprise 40 Technology 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.