Correlation Between Thayer Ventures and Heartbeam Warrant

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

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

Diversification Opportunities for Thayer Ventures and Heartbeam Warrant

-0.48

Correlation Coefficient

Thayer Ventures  Heartbeam Warrant

Very good diversification

The 3 months correlation between Thayer and Heartbeam is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and Heartbeam Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartbeam Warrant and Thayer Ventures 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 Thayer Ventures Acquisition are associated (or correlated) with Heartbeam Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartbeam Warrant has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and Heartbeam Warrant go up and down completely randomly.

Pair Corralation between Thayer Ventures and Heartbeam Warrant

Assuming the 90 days horizon Thayer Ventures is expected to generate 7.67 times less return on investment than Heartbeam Warrant. In addition to that, Thayer Ventures is 1.99 times more volatile than Heartbeam Warrant. It trades about 0.01 of its total potential returns per unit of risk. Heartbeam Warrant is currently generating about 0.13 per unit of volatility. If you would invest  50.00  in Heartbeam Warrant on September 22, 2024 and sell it today you would earn a total of  29.00  from holding Heartbeam Warrant or generate 58.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.19%
Values	Daily Returns

Thayer Ventures Acquisition  vs.  Heartbeam Warrant

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 fairly uncertain basic indicators, Thayer Ventures may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Heartbeam Warrant

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Heartbeam Warrant are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Heartbeam Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thayer Ventures and Heartbeam Warrant

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

The idea behind Thayer Ventures Acquisition and Heartbeam Warrant 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.