Correlation Between Sunshine Biopharma and Thayer Ventures

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

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

Diversification Opportunities for Sunshine Biopharma and Thayer Ventures

-0.24

Correlation Coefficient

Sunshine Biopharma  Thayer Ventures

Very good diversification

The 3 months correlation between Sunshine and Thayer is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sunshine Biopharma Warrant and Thayer Ventures Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thayer Ventures Acqu and Sunshine Biopharma 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 Sunshine Biopharma Warrant are associated (or correlated) with Thayer Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thayer Ventures Acqu has no effect on the direction of Sunshine Biopharma i.e., Sunshine Biopharma and Thayer Ventures go up and down completely randomly.

Pair Corralation between Sunshine Biopharma and Thayer Ventures

Assuming the 90 days horizon Sunshine Biopharma Warrant is expected to generate 0.83 times more return on investment than Thayer Ventures. However, Sunshine Biopharma Warrant is 1.21 times less risky than Thayer Ventures. It trades about 0.15 of its potential returns per unit of risk. Thayer Ventures Acquisition is currently generating about 0.07 per unit of risk. If you would invest  9.51  in Sunshine Biopharma Warrant on September 2, 2024 and sell it today you would earn a total of  7.49  from holding Sunshine Biopharma Warrant or generate 78.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.06%
Values	Daily Returns

Sunshine Biopharma Warrant  vs.  Thayer Ventures Acquisition

Sunshine Biopharma

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sunshine Biopharma Warrant are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Sunshine Biopharma showed solid returns over the last few months and may actually be approaching a breakup point.

Thayer Ventures Acqu

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thayer Ventures Acquisition are ranked lower than 5 (%) 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.

Pair Trading with Sunshine Biopharma and Thayer Ventures

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

The idea behind Sunshine Biopharma Warrant and Thayer Ventures Acquisition 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.