Correlation Between Zaptec AS and Thunderful Group

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

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

Diversification Opportunities for Zaptec AS and Thunderful Group

0.83

Correlation Coefficient

Zaptec AS  Thunderful Group

Very poor diversification

The 3 months correlation between Zaptec and Thunderful is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Zaptec AS and Thunderful Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderful Group and Zaptec AS 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 Zaptec AS are associated (or correlated) with Thunderful Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderful Group has no effect on the direction of Zaptec AS i.e., Zaptec AS and Thunderful Group go up and down completely randomly.

Pair Corralation between Zaptec AS and Thunderful Group

Assuming the 90 days trading horizon Zaptec AS is expected to generate 0.71 times more return on investment than Thunderful Group. However, Zaptec AS is 1.41 times less risky than Thunderful Group. It trades about -0.02 of its potential returns per unit of risk. Thunderful Group AB is currently generating about -0.1 per unit of risk. If you would invest  2,192  in Zaptec AS on September 26, 2024 and sell it today you would lose (1,153) from holding Zaptec AS or give up 52.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Zaptec AS  vs.  Thunderful Group AB

Zaptec AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zaptec AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Zaptec AS is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Zaptec AS and Thunderful Group

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

The idea behind Zaptec AS and Thunderful Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.