Correlation Between Birchtech Corp and Thunderbird Entertainment

Can any of the company-specific risk be diversified away by investing in both Birchtech Corp and Thunderbird Entertainment 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 Birchtech Corp and Thunderbird Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Birchtech Corp and Thunderbird Entertainment

-0.38

Correlation Coefficient

Birchtech Corp  Thunderbird Entertainment

Very good diversification

The 3 months correlation between Birchtech and Thunderbird is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and Thunderbird Entertainment Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderbird Entertainment and Birchtech Corp 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 Birchtech Corp are associated (or correlated) with Thunderbird Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderbird Entertainment has no effect on the direction of Birchtech Corp i.e., Birchtech Corp and Thunderbird Entertainment go up and down completely randomly.

Pair Corralation between Birchtech Corp and Thunderbird Entertainment

Assuming the 90 days trading horizon Birchtech Corp is expected to under-perform the Thunderbird Entertainment. In addition to that, Birchtech Corp is 1.47 times more volatile than Thunderbird Entertainment Group. It trades about -0.14 of its total potential returns per unit of risk. Thunderbird Entertainment Group is currently generating about -0.05 per unit of volatility. If you would invest  205.00  in Thunderbird Entertainment Group on August 30, 2024 and sell it today you would lose (22.00) from holding Thunderbird Entertainment Group or give up 10.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	24.19%
Values	Daily Returns

Birchtech Corp  vs.  Thunderbird Entertainment Grou

Birchtech Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Birchtech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Thunderbird Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thunderbird Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Birchtech Corp and Thunderbird Entertainment

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

The idea behind Birchtech Corp and Thunderbird Entertainment Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.