Correlation Between Microvast Holdings and Thayer Ventures

Can any of the company-specific risk be diversified away by investing in both Microvast Holdings and Thayer Ventures 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 Microvast Holdings and Thayer Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Microvast Holdings and Thayer Ventures Acquisition, you can compare the effects of market volatilities on Microvast Holdings and Thayer Ventures 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 Microvast Holdings with a short position of Thayer Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and Thayer Ventures.

Diversification Opportunities for Microvast Holdings and Thayer Ventures

0.41

Correlation Coefficient

Microvast Holdings  Thayer Ventures

Very weak diversification

The 3 months correlation between Microvast and Thayer is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and Thayer Ventures Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thayer Ventures Acqu and Microvast Holdings 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 Microvast Holdings are associated (or correlated) with Thayer Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thayer Ventures Acqu has no effect on the direction of Microvast Holdings i.e., Microvast Holdings and Thayer Ventures go up and down completely randomly.

Pair Corralation between Microvast Holdings and Thayer Ventures

Assuming the 90 days horizon Microvast Holdings is expected to under-perform the Thayer Ventures. In addition to that, Microvast Holdings is 1.14 times more volatile than Thayer Ventures Acquisition. It trades about -0.09 of its total potential returns per unit of risk. Thayer Ventures Acquisition is currently generating about 0.07 per unit of volatility. If you would invest  0.90  in Thayer Ventures Acquisition on December 30, 2024 and sell it today you would earn a total of  0.10  from holding Thayer Ventures Acquisition or generate 11.11% return on investment over 90 days.

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

Microvast Holdings  vs.  Thayer Ventures Acquisition

Microvast Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Microvast Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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.

Pair Trading with Microvast Holdings and Thayer Ventures

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

The idea behind Microvast Holdings and Thayer Ventures Acquisition 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.