Correlation Between Thayer Ventures and Latch

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

Diversification Opportunities for Thayer Ventures and Latch

0.49

Correlation Coefficient

Thayer Ventures  Latch

Very weak diversification

The 3 months correlation between Thayer and Latch is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and Latch Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latch Inc 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 Latch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latch Inc has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and Latch go up and down completely randomly.

Pair Corralation between Thayer Ventures and Latch

If you would invest  0.60  in Thayer Ventures Acquisition on October 26, 2024 and sell it today you would earn a total of  1.70  from holding Thayer Ventures Acquisition or generate 283.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.38%
Values	Daily Returns

Thayer Ventures Acquisition  vs.  Latch Inc

Thayer Ventures Acqu

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thayer Ventures Acquisition are ranked lower than 10 (%) 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.

Latch Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Latch Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical indicators, Latch is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Thayer Ventures and Latch

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

The idea behind Thayer Ventures Acquisition and Latch Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.