Correlation Between Thayer Ventures and Pagaya Technologies

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

Diversification Opportunities for Thayer Ventures and Pagaya Technologies

0.0

Correlation Coefficient

Thayer Ventures  Pagaya Technologies

Pay attention - limited upside

The 3 months correlation between Thayer and Pagaya is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and Pagaya Technologies Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pagaya Technologies 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 Pagaya Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pagaya Technologies has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and Pagaya Technologies go up and down completely randomly.

Pair Corralation between Thayer Ventures and Pagaya Technologies

If you would invest  1.50  in Thayer Ventures Acquisition on December 2, 2024 and sell it today you would lose (0.10) from holding Thayer Ventures Acquisition or give up 6.67% of portfolio value over 90 days.

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

Thayer Ventures Acquisition  vs.  Pagaya Technologies Ltd

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.

Pagaya Technologies

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Thayer Ventures and Pagaya Technologies

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

The idea behind Thayer Ventures Acquisition and Pagaya Technologies Ltd 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.