Correlation Between Thayer Ventures and Duos Technologies

Can any of the company-specific risk be diversified away by investing in both Thayer Ventures and Duos Technologies 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 Thayer Ventures and Duos Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thayer Ventures Acquisition and Duos Technologies Group, you can compare the effects of market volatilities on Thayer Ventures and Duos Technologies 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 Thayer Ventures with a short position of Duos Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thayer Ventures and Duos Technologies.

Diversification Opportunities for Thayer Ventures and Duos Technologies

-0.48

Correlation Coefficient

Thayer Ventures  Duos Technologies

Very good diversification

The 3 months correlation between Thayer and Duos is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and Duos Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duos Technologies and Thayer Ventures 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 Thayer Ventures Acquisition are associated (or correlated) with Duos Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duos Technologies has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and Duos Technologies go up and down completely randomly.

Pair Corralation between Thayer Ventures and Duos Technologies

Assuming the 90 days horizon Thayer Ventures Acquisition is expected to generate 3.24 times more return on investment than Duos Technologies. However, Thayer Ventures is 3.24 times more volatile than Duos Technologies Group. It trades about 0.02 of its potential returns per unit of risk. Duos Technologies Group is currently generating about 0.02 per unit of risk. If you would invest  1.30  in Thayer Ventures Acquisition on September 20, 2024 and sell it today you would lose (0.50) from holding Thayer Ventures Acquisition or give up 38.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Thayer Ventures Acquisition  vs.  Duos Technologies Group

Thayer Ventures Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thayer Ventures Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Duos Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Duos Technologies Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Duos Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thayer Ventures and Duos Technologies

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

The idea behind Thayer Ventures Acquisition and Duos Technologies 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.