Correlation Between Thunderful Group and Acast AB

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

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

Diversification Opportunities for Thunderful Group and Acast AB

0.53

Correlation Coefficient

Thunderful Group  Acast AB

Very weak diversification

The 3 months correlation between Thunderful and Acast is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Thunderful Group AB and Acast AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acast AB and Thunderful Group 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 Thunderful Group AB are associated (or correlated) with Acast AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acast AB has no effect on the direction of Thunderful Group i.e., Thunderful Group and Acast AB go up and down completely randomly.

Pair Corralation between Thunderful Group and Acast AB

Assuming the 90 days trading horizon Thunderful Group AB is expected to under-perform the Acast AB. In addition to that, Thunderful Group is 1.17 times more volatile than Acast AB. It trades about -0.31 of its total potential returns per unit of risk. Acast AB is currently generating about 0.09 per unit of volatility. If you would invest  1,490  in Acast AB on September 27, 2024 and sell it today you would earn a total of  70.00  from holding Acast AB or generate 4.7% return on investment over 90 days.

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

Thunderful Group AB  vs.  Acast AB

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.

Acast AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acast AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Acast AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Thunderful Group and Acast AB

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

The idea behind Thunderful Group AB and Acast 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.