Correlation Between Fernhill Corp and Thinkific Labs

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

By analyzing existing cross correlation between Fernhill Corp and Thinkific Labs, you can compare the effects of market volatilities on Fernhill Corp and Thinkific Labs 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 Fernhill Corp with a short position of Thinkific Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fernhill Corp and Thinkific Labs.

Diversification Opportunities for Fernhill Corp and Thinkific Labs

0.08

Correlation Coefficient

Fernhill Corp  Thinkific Labs

Significant diversification

The 3 months correlation between Fernhill and Thinkific is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fernhill Corp and Thinkific Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thinkific Labs and Fernhill Corp 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 Fernhill Corp are associated (or correlated) with Thinkific Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thinkific Labs has no effect on the direction of Fernhill Corp i.e., Fernhill Corp and Thinkific Labs go up and down completely randomly.

Pair Corralation between Fernhill Corp and Thinkific Labs

Given the investment horizon of 90 days Fernhill Corp is expected to generate 7.92 times more return on investment than Thinkific Labs. However, Fernhill Corp is 7.92 times more volatile than Thinkific Labs. It trades about 0.01 of its potential returns per unit of risk. Thinkific Labs is currently generating about -0.04 per unit of risk. If you would invest  0.07  in Fernhill Corp on December 21, 2024 and sell it today you would lose (0.03) from holding Fernhill Corp or give up 42.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Fernhill Corp  vs.  Thinkific Labs

Fernhill Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fernhill Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Fernhill Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Thinkific Labs

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Fernhill Corp and Thinkific Labs

The main advantage of trading using opposite Fernhill Corp and Thinkific Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fernhill Corp position performs unexpectedly, Thinkific Labs 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 Thinkific Labs will offset losses from the drop in Thinkific Labs' long position.

The idea behind Fernhill Corp and Thinkific Labs 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 CEOs Directory module to screen CEOs from public companies around the world.