Correlation Between Thayer Ventures and Rail Vision

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

Diversification Opportunities for Thayer Ventures and Rail Vision

0.03

Correlation Coefficient

Thayer Ventures  Rail Vision

Significant diversification

The 3 months correlation between Thayer and Rail is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and Rail Vision Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rail Vision 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 Rail Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rail Vision has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and Rail Vision go up and down completely randomly.

Pair Corralation between Thayer Ventures and Rail Vision

Assuming the 90 days horizon Thayer Ventures is expected to generate 17.62 times less return on investment than Rail Vision. But when comparing it to its historical volatility, Thayer Ventures Acquisition is 8.1 times less risky than Rail Vision. It trades about 0.1 of its potential returns per unit of risk. Rail Vision Ltd is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  7.29  in Rail Vision Ltd on September 21, 2024 and sell it today you would lose (0.04) from holding Rail Vision Ltd or give up 0.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	71.03%
Values	Daily Returns

Thayer Ventures Acquisition  vs.  Rail Vision Ltd

Thayer Ventures Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thayer Ventures Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unfluctuating basic indicators, Thayer Ventures may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Rail Vision

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rail Vision Ltd are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Rail Vision showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thayer Ventures and Rail Vision

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

The idea behind Thayer Ventures Acquisition and Rail Vision 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.