Correlation Between Thunderbird Entertainment and Fredonia Mining

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

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

Diversification Opportunities for Thunderbird Entertainment and Fredonia Mining

0.5

Correlation Coefficient

Thunderbird Entertainment  Fredonia Mining

Very weak diversification

The 3 months correlation between Thunderbird and Fredonia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thunderbird Entertainment Grou and Fredonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fredonia Mining and Thunderbird Entertainment 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 Thunderbird Entertainment Group are associated (or correlated) with Fredonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fredonia Mining has no effect on the direction of Thunderbird Entertainment i.e., Thunderbird Entertainment and Fredonia Mining go up and down completely randomly.

Pair Corralation between Thunderbird Entertainment and Fredonia Mining

Assuming the 90 days trading horizon Thunderbird Entertainment Group is expected to generate 0.39 times more return on investment than Fredonia Mining. However, Thunderbird Entertainment Group is 2.56 times less risky than Fredonia Mining. It trades about -0.05 of its potential returns per unit of risk. Fredonia Mining is currently generating about -0.05 per unit of risk. If you would invest  185.00  in Thunderbird Entertainment Group on December 25, 2024 and sell it today you would lose (18.00) from holding Thunderbird Entertainment Group or give up 9.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Thunderbird Entertainment Grou  vs.  Fredonia Mining

Thunderbird Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thunderbird Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Fredonia Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fredonia Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental 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.

Pair Trading with Thunderbird Entertainment and Fredonia Mining

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

The idea behind Thunderbird Entertainment Group and Fredonia Mining 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.