Correlation Between Thayer Ventures and Karooooo

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

Diversification Opportunities for Thayer Ventures and Karooooo

-0.4

Correlation Coefficient

Thayer Ventures  Karooooo

Very good diversification

The 3 months correlation between Thayer and Karooooo is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and Karooooo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karooooo 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 Karooooo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karooooo has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and Karooooo go up and down completely randomly.

Pair Corralation between Thayer Ventures and Karooooo

Assuming the 90 days horizon Thayer Ventures Acquisition is expected to under-perform the Karooooo. In addition to that, Thayer Ventures is 3.87 times more volatile than Karooooo. It trades about -0.02 of its total potential returns per unit of risk. Karooooo is currently generating about 0.07 per unit of volatility. If you would invest  4,002  in Karooooo on September 20, 2024 and sell it today you would earn a total of  552.00  from holding Karooooo or generate 13.79% return on investment over 90 days.

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

Thayer Ventures Acquisition  vs.  Karooooo

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.

Karooooo

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Karooooo are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Karooooo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thayer Ventures and Karooooo

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

The idea behind Thayer Ventures Acquisition and Karooooo 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.