Correlation Between Thryv Holdings and Locafy

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

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

Diversification Opportunities for Thryv Holdings and Locafy

0.7

Correlation Coefficient

Thryv Holdings  Locafy

Poor diversification

The 3 months correlation between Thryv and Locafy is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Thryv Holdings and Locafy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locafy Limited and Thryv Holdings 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 Thryv Holdings are associated (or correlated) with Locafy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locafy Limited has no effect on the direction of Thryv Holdings i.e., Thryv Holdings and Locafy go up and down completely randomly.

Pair Corralation between Thryv Holdings and Locafy

Given the investment horizon of 90 days Thryv Holdings is expected to generate 26.15 times less return on investment than Locafy. But when comparing it to its historical volatility, Thryv Holdings is 10.55 times less risky than Locafy. It trades about 0.02 of its potential returns per unit of risk. Locafy Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,652  in Locafy Limited on December 26, 2024 and sell it today you would lose (1,288) from holding Locafy Limited or give up 77.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	86.67%
Values	Daily Returns

Thryv Holdings  vs.  Locafy Limited

Thryv Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thryv Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Thryv Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Locafy Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Locafy Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Locafy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thryv Holdings and Locafy

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

The idea behind Thryv Holdings and Locafy Limited 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 Transaction History module to view history of all your transactions and understand their impact on performance.