Correlation Between Thayer Ventures and NextPlat Corp

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

Diversification Opportunities for Thayer Ventures and NextPlat Corp

0.52

Correlation Coefficient

Thayer Ventures  NextPlat Corp

Very weak diversification

The 3 months correlation between Thayer and NextPlat is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Thayer Ventures Acquisition and NextPlat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextPlat Corp 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 NextPlat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextPlat Corp has no effect on the direction of Thayer Ventures i.e., Thayer Ventures and NextPlat Corp go up and down completely randomly.

Pair Corralation between Thayer Ventures and NextPlat Corp

Assuming the 90 days horizon Thayer Ventures is expected to generate 1.43 times less return on investment than NextPlat Corp. But when comparing it to its historical volatility, Thayer Ventures Acquisition is 1.76 times less risky than NextPlat Corp. It trades about 0.05 of its potential returns per unit of risk. NextPlat Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  20.00  in NextPlat Corp on September 22, 2024 and sell it today you would lose (9.00) from holding NextPlat Corp or give up 45.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	57.14%
Values	Daily Returns

Thayer Ventures Acquisition  vs.  NextPlat Corp

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 fairly inconsistent basic indicators, Thayer Ventures may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NextPlat Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NextPlat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's essential 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.

Pair Trading with Thayer Ventures and NextPlat Corp

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

The idea behind Thayer Ventures Acquisition and NextPlat Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.