Correlation Between Via Renewables and Thunder Bridge
Can any of the company-specific risk be diversified away by investing in both Via Renewables 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 Via Renewables and Thunder Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Via Renewables and Thunder Bridge Capital, you can compare the effects of market volatilities on Via Renewables 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 Via Renewables with a short position of Thunder Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and Thunder Bridge.
Diversification Opportunities for Via Renewables and Thunder Bridge
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Via and Thunder is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables 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 Via Renewables 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 Via Renewables 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 Via Renewables i.e., Via Renewables and Thunder Bridge go up and down completely randomly.
Pair Corralation between Via Renewables and Thunder Bridge
Assuming the 90 days horizon Via Renewables is expected to generate 4.05 times less return on investment than Thunder Bridge. But when comparing it to its historical volatility, Via Renewables is 11.1 times less risky than Thunder Bridge. It trades about 0.37 of its potential returns per unit of risk. Thunder Bridge Capital is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,119 in Thunder Bridge Capital on September 25, 2024 and sell it today you would earn a total of 123.00 from holding Thunder Bridge Capital or generate 10.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 61.9% |
Values | Daily Returns |
Via Renewables vs. Thunder Bridge Capital
Performance |
Timeline |
Via Renewables |
Thunder Bridge Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Via Renewables and Thunder Bridge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Via Renewables and Thunder Bridge
The main advantage of trading using opposite Via Renewables and Thunder Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables 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.Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
Thunder Bridge vs. Aquagold International | Thunder Bridge vs. Morningstar Unconstrained Allocation | Thunder Bridge vs. Thrivent High Yield | Thunder Bridge vs. Via Renewables |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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