Correlation Between Thayer Ventures and Tritium Dcfc

Can any of the company-specific risk be diversified away by investing in both Thayer Ventures and Tritium Dcfc 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 Tritium Dcfc 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 Tritium Dcfc, you can compare the effects of market volatilities on Thayer Ventures and Tritium Dcfc 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 Tritium Dcfc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thayer Ventures and Tritium Dcfc.

Diversification Opportunities for Thayer Ventures and Tritium Dcfc

0.53

Correlation Coefficient

Thayer Ventures  Tritium Dcfc

Very weak diversification

The 3 months correlation between Thayer and Tritium is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and Tritium Dcfc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tritium Dcfc 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 Tritium Dcfc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tritium Dcfc has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and Tritium Dcfc go up and down completely randomly.

Pair Corralation between Thayer Ventures and Tritium Dcfc

Assuming the 90 days horizon Thayer Ventures is expected to generate 5.53 times less return on investment than Tritium Dcfc. But when comparing it to its historical volatility, Thayer Ventures Acquisition is 2.54 times less risky than Tritium Dcfc. It trades about 0.07 of its potential returns per unit of risk. Tritium Dcfc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1.20  in Tritium Dcfc on December 29, 2024 and sell it today you would earn a total of  1.80  from holding Tritium Dcfc or generate 150.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Thayer Ventures Acquisition  vs.  Tritium Dcfc

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 5 (%) 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.

Tritium Dcfc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tritium Dcfc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Tritium Dcfc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thayer Ventures and Tritium Dcfc

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

The idea behind Thayer Ventures Acquisition and Tritium Dcfc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.