Correlation Between Thayer Ventures and Kimball Electronics

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

Diversification Opportunities for Thayer Ventures and Kimball Electronics

-0.1

Correlation Coefficient

Thayer Ventures  Kimball Electronics

Good diversification

The 3 months correlation between Thayer and Kimball is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics 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 Kimball Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimball Electronics has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and Kimball Electronics go up and down completely randomly.

Pair Corralation between Thayer Ventures and Kimball Electronics

Assuming the 90 days horizon Thayer Ventures Acquisition is expected to generate 9.82 times more return on investment than Kimball Electronics. However, Thayer Ventures is 9.82 times more volatile than Kimball Electronics. It trades about 0.08 of its potential returns per unit of risk. Kimball Electronics is currently generating about -0.02 per unit of risk. If you would invest  10.00  in Thayer Ventures Acquisition on October 6, 2024 and sell it today you would lose (8.60) from holding Thayer Ventures Acquisition or give up 86.0% of portfolio value over 90 days.

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

Thayer Ventures Acquisition  vs.  Kimball Electronics

Thayer Ventures Acqu

Risk-Adjusted Performance

5 of 100

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.

Kimball Electronics

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kimball Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Kimball Electronics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Thayer Ventures and Kimball Electronics

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

The idea behind Thayer Ventures Acquisition and Kimball Electronics 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.