Correlation Between Thunder Bridge and Keyera Corp

Can any of the company-specific risk be diversified away by investing in both Thunder Bridge and Keyera Corp 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 Thunder Bridge and Keyera Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thunder Bridge Capital and Keyera Corp, you can compare the effects of market volatilities on Thunder Bridge and Keyera Corp 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 Thunder Bridge with a short position of Keyera Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Bridge and Keyera Corp.

Diversification Opportunities for Thunder Bridge and Keyera Corp

-0.47

Correlation Coefficient

Thunder Bridge  Keyera Corp

Very good diversification

The 3 months correlation between Thunder and Keyera is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Bridge Capital and Keyera Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyera Corp and Thunder Bridge 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 Thunder Bridge Capital are associated (or correlated) with Keyera Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyera Corp has no effect on the direction of Thunder Bridge i.e., Thunder Bridge and Keyera Corp go up and down completely randomly.

Pair Corralation between Thunder Bridge and Keyera Corp

Assuming the 90 days horizon Thunder Bridge is expected to generate 1.35 times less return on investment than Keyera Corp. In addition to that, Thunder Bridge is 1.77 times more volatile than Keyera Corp. It trades about 0.05 of its total potential returns per unit of risk. Keyera Corp is currently generating about 0.13 per unit of volatility. If you would invest  2,231  in Keyera Corp on October 2, 2024 and sell it today you would earn a total of  841.00  from holding Keyera Corp or generate 37.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Thunder Bridge Capital  vs.  Keyera Corp

Thunder Bridge Capital

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Thunder Bridge Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, Thunder Bridge unveiled solid returns over the last few months and may actually be approaching a breakup point.

Keyera Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Thunder Bridge and Keyera Corp

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

The idea behind Thunder Bridge Capital and Keyera Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.