Correlation Between Thayer Ventures and NextPlat Corp

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

Diversification Opportunities for Thayer Ventures and NextPlat Corp

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Thayer and NextPlat is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and NextPlat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextPlat Corp 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 NextPlat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextPlat Corp has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and NextPlat Corp go up and down completely randomly.

Pair Corralation between Thayer Ventures and NextPlat Corp

Assuming the 90 days horizon Thayer Ventures Acquisition is expected to generate 0.89 times more return on investment than NextPlat Corp. However, Thayer Ventures Acquisition is 1.12 times less risky than NextPlat Corp. It trades about 0.06 of its potential returns per unit of risk. NextPlat Corp is currently generating about 0.0 per unit of risk. If you would invest  1.50  in Thayer Ventures Acquisition on October 1, 2024 and sell it today you would lose (0.25) from holding Thayer Ventures Acquisition or give up 16.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy79.69%
ValuesDaily Returns

Thayer Ventures Acquisition  vs.  NextPlat Corp

 Performance 
       Timeline  
Thayer Ventures Acqu 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Thayer Ventures Acquisition are ranked lower than 4 (%) 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.
NextPlat Corp 

Risk-Adjusted Performance

0 of 100

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

Thayer Ventures and NextPlat Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Thayer Ventures and NextPlat Corp

The main advantage of trading using opposite Thayer Ventures and NextPlat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thayer Ventures position performs unexpectedly, NextPlat Corp 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 NextPlat Corp will offset losses from the drop in NextPlat Corp's long position.
The idea behind Thayer Ventures Acquisition and NextPlat Corp 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.
Check out your portfolio center.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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