Correlation Between Thayer Ventures and Expensify

Can any of the company-specific risk be diversified away by investing in both Thayer Ventures and Expensify 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 Expensify 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 Expensify, you can compare the effects of market volatilities on Thayer Ventures and Expensify 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 Expensify. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thayer Ventures and Expensify.

Diversification Opportunities for Thayer Ventures and Expensify

-0.26

Correlation Coefficient

Thayer Ventures  Expensify

Very good diversification

The 3 months correlation between Thayer and Expensify is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and Expensify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expensify 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 Expensify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expensify has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and Expensify go up and down completely randomly.

Pair Corralation between Thayer Ventures and Expensify

Assuming the 90 days horizon Thayer Ventures Acquisition is expected to generate 5.51 times more return on investment than Expensify. However, Thayer Ventures is 5.51 times more volatile than Expensify. It trades about 0.05 of its potential returns per unit of risk. Expensify is currently generating about 0.16 per unit of risk. If you would invest  2.60  in Thayer Ventures Acquisition on September 13, 2024 and sell it today you would lose (1.64) from holding Thayer Ventures Acquisition or give up 63.08% of portfolio value over 90 days.

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

Thayer Ventures Acquisition  vs.  Expensify

Thayer Ventures Acqu

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thayer Ventures Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Thayer Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

Expensify

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Expensify are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Expensify showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thayer Ventures and Expensify

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

The idea behind Thayer Ventures Acquisition and Expensify 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.