Correlation Between Thunderful Group and Media

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

Diversification Opportunities for Thunderful Group and Media

-0.75

Correlation Coefficient

Thunderful Group  Media

Pay attention - limited upside

The 3 months correlation between Thunderful and Media is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Thunderful Group AB and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Thunderful Group i.e., Thunderful Group and Media go up and down completely randomly.

Pair Corralation between Thunderful Group and Media

Assuming the 90 days trading horizon Thunderful Group AB is expected to under-perform the Media. In addition to that, Thunderful Group is 1.4 times more volatile than Media and Games. It trades about -0.23 of its total potential returns per unit of risk. Media and Games is currently generating about -0.06 per unit of volatility. If you would invest  4,380  in Media and Games on September 1, 2024 and sell it today you would lose (280.00) from holding Media and Games or give up 6.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Thunderful Group AB  vs.  Media and Games

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Media and Games

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Media and Games are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thunderful Group and Media

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

The idea behind Thunderful Group AB and Media and Games 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.