Correlation Between Thunder Bridge and WinVest Acquisition

Can any of the company-specific risk be diversified away by investing in both Thunder Bridge and WinVest Acquisition 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 Thunder Bridge and WinVest Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thunder Bridge Capital and WinVest Acquisition Corp, you can compare the effects of market volatilities on Thunder Bridge and WinVest Acquisition 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 Thunder Bridge with a short position of WinVest Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunder Bridge and WinVest Acquisition.

Diversification Opportunities for Thunder Bridge and WinVest Acquisition

0.61

Correlation Coefficient

Thunder Bridge  WinVest Acquisition

Poor diversification

The 3 months correlation between Thunder and WinVest is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Bridge Capital and WinVest Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WinVest Acquisition Corp and Thunder Bridge 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 Thunder Bridge Capital are associated (or correlated) with WinVest Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WinVest Acquisition Corp has no effect on the direction of Thunder Bridge i.e., Thunder Bridge and WinVest Acquisition go up and down completely randomly.

Pair Corralation between Thunder Bridge and WinVest Acquisition

Given the investment horizon of 90 days Thunder Bridge Capital is expected to generate 1.65 times more return on investment than WinVest Acquisition. However, Thunder Bridge is 1.65 times more volatile than WinVest Acquisition Corp. It trades about 0.11 of its potential returns per unit of risk. WinVest Acquisition Corp is currently generating about 0.06 per unit of risk. If you would invest  1,049  in Thunder Bridge Capital on September 16, 2024 and sell it today you would earn a total of  175.00  from holding Thunder Bridge Capital or generate 16.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.38%
Values	Daily Returns

Thunder Bridge Capital  vs.  WinVest Acquisition Corp

Thunder Bridge Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thunder Bridge Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Thunder Bridge reported solid returns over the last few months and may actually be approaching a breakup point.

WinVest Acquisition Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WinVest Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, WinVest Acquisition is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Thunder Bridge and WinVest Acquisition

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

The idea behind Thunder Bridge Capital and WinVest Acquisition 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.