Correlation Between PAX Global and Thunderbird Entertainment

Can any of the company-specific risk be diversified away by investing in both PAX Global and Thunderbird Entertainment 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 PAX Global and Thunderbird Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PAX Global Technology and Thunderbird Entertainment Group, you can compare the effects of market volatilities on PAX Global and Thunderbird Entertainment 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 PAX Global with a short position of Thunderbird Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAX Global and Thunderbird Entertainment.

Diversification Opportunities for PAX Global and Thunderbird Entertainment

0.36

Correlation Coefficient

PAX Global  Thunderbird Entertainment

Weak diversification

The 3 months correlation between PAX and Thunderbird is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PAX Global Technology and Thunderbird Entertainment Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderbird Entertainment and PAX Global 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 PAX Global Technology are associated (or correlated) with Thunderbird Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderbird Entertainment has no effect on the direction of PAX Global i.e., PAX Global and Thunderbird Entertainment go up and down completely randomly.

Pair Corralation between PAX Global and Thunderbird Entertainment

Assuming the 90 days horizon PAX Global Technology is expected to generate 25.31 times more return on investment than Thunderbird Entertainment. However, PAX Global is 25.31 times more volatile than Thunderbird Entertainment Group. It trades about 0.2 of its potential returns per unit of risk. Thunderbird Entertainment Group is currently generating about -0.02 per unit of risk. If you would invest  18.00  in PAX Global Technology on October 7, 2024 and sell it today you would earn a total of  44.00  from holding PAX Global Technology or generate 244.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	78.02%
Values	Daily Returns

PAX Global Technology  vs.  Thunderbird Entertainment Grou

PAX Global Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PAX Global Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PAX Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Thunderbird Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thunderbird Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PAX Global and Thunderbird Entertainment

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

The idea behind PAX Global Technology and Thunderbird Entertainment Group 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.