Correlation Between Sinch AB and Thunderful Group

Can any of the company-specific risk be diversified away by investing in both Sinch AB and Thunderful Group 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 Sinch AB and Thunderful Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Sinch AB and Thunderful Group

0.88

Correlation Coefficient

Sinch AB  Thunderful Group

Very poor diversification

The 3 months correlation between Sinch and Thunderful is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sinch AB and Thunderful Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderful Group and Sinch AB 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 Sinch AB are associated (or correlated) with Thunderful Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderful Group has no effect on the direction of Sinch AB i.e., Sinch AB and Thunderful Group go up and down completely randomly.

Pair Corralation between Sinch AB and Thunderful Group

Assuming the 90 days trading horizon Sinch AB is expected to generate 1.05 times more return on investment than Thunderful Group. However, Sinch AB is 1.05 times more volatile than Thunderful Group AB. It trades about -0.16 of its potential returns per unit of risk. Thunderful Group AB is currently generating about -0.21 per unit of risk. If you would invest  3,226  in Sinch AB on September 26, 2024 and sell it today you would lose (1,227) from holding Sinch AB or give up 38.03% of portfolio value over 90 days.

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

Sinch AB  vs.  Thunderful Group AB

Sinch AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinch AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Thunderful Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thunderful Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sinch AB and Thunderful Group

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

The idea behind Sinch AB and Thunderful Group AB 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.