Correlation Between Thunder Bridge and PACIFIC

Can any of the company-specific risk be diversified away by investing in both Thunder Bridge and PACIFIC 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 PACIFIC 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 PACIFIC GAS AND, you can compare the effects of market volatilities on Thunder Bridge and PACIFIC 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 PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Bridge and PACIFIC.

Diversification Opportunities for Thunder Bridge and PACIFIC

0.31

Correlation Coefficient

Thunder Bridge  PACIFIC

Weak diversification

The 3 months correlation between Thunder and PACIFIC is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Bridge Capital and PACIFIC GAS AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS AND 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 PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS AND has no effect on the direction of Thunder Bridge i.e., Thunder Bridge and PACIFIC go up and down completely randomly.

Pair Corralation between Thunder Bridge and PACIFIC

Assuming the 90 days horizon Thunder Bridge Capital is expected to under-perform the PACIFIC. In addition to that, Thunder Bridge is 18.82 times more volatile than PACIFIC GAS AND. It trades about -0.58 of its total potential returns per unit of risk. PACIFIC GAS AND is currently generating about -0.07 per unit of volatility. If you would invest  9,888  in PACIFIC GAS AND on October 10, 2024 and sell it today you would lose (36.00) from holding PACIFIC GAS AND or give up 0.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	14.29%
Values	Daily Returns

Thunder Bridge Capital  vs.  PACIFIC GAS AND

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.

PACIFIC GAS AND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PACIFIC GAS AND has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PACIFIC is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thunder Bridge and PACIFIC

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

The idea behind Thunder Bridge Capital and PACIFIC GAS AND 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.