Correlation Between Twelve Seas and Thunder Bridge

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Can any of the company-specific risk be diversified away by investing in both Twelve Seas and Thunder Bridge 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 Twelve Seas and Thunder Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twelve Seas Investment and Thunder Bridge Capital, you can compare the effects of market volatilities on Twelve Seas and Thunder Bridge 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 Twelve Seas with a short position of Thunder Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twelve Seas and Thunder Bridge.

Diversification Opportunities for Twelve Seas and Thunder Bridge

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Twelve and Thunder is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Twelve Seas Investment and Thunder Bridge Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Bridge Capital and Twelve Seas 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 Twelve Seas Investment are associated (or correlated) with Thunder Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Bridge Capital has no effect on the direction of Twelve Seas i.e., Twelve Seas and Thunder Bridge go up and down completely randomly.

Pair Corralation between Twelve Seas and Thunder Bridge

If you would invest  5.33  in Thunder Bridge Capital on September 18, 2024 and sell it today you would earn a total of  0.00  from holding Thunder Bridge Capital or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Twelve Seas Investment  vs.  Thunder Bridge Capital

 Performance 
       Timeline  
Twelve Seas Investment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Twelve Seas Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Twelve Seas is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Thunder Bridge Capital 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
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 fairly stable basic indicators, Thunder Bridge is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Twelve Seas and Thunder Bridge Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Twelve Seas and Thunder Bridge

The main advantage of trading using opposite Twelve Seas and Thunder Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twelve Seas position performs unexpectedly, Thunder Bridge 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 Thunder Bridge will offset losses from the drop in Thunder Bridge's long position.
The idea behind Twelve Seas Investment and Thunder Bridge Capital 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.
Check out your portfolio center.
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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