Correlation Between Thunder Bridge and Deep Medicine

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

Diversification Opportunities for Thunder Bridge and Deep Medicine

0.76

Correlation Coefficient

Thunder Bridge  Deep Medicine

Poor diversification

The 3 months correlation between Thunder and Deep is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Thunder Bridge Capital and Deep Medicine Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deep Medicine Acquisition 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 Deep Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deep Medicine Acquisition has no effect on the direction of Thunder Bridge i.e., Thunder Bridge and Deep Medicine go up and down completely randomly.

Pair Corralation between Thunder Bridge and Deep Medicine

If you would invest  1,050  in Thunder Bridge Capital on September 15, 2024 and sell it today you would earn a total of  192.00  from holding Thunder Bridge Capital or generate 18.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.61%
Values	Daily Returns

Thunder Bridge Capital  vs.  Deep Medicine Acquisition

Thunder Bridge Capital

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thunder Bridge Capital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Thunder Bridge unveiled solid returns over the last few months and may actually be approaching a breakup point.

Deep Medicine Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deep Medicine Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Deep Medicine is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Thunder Bridge and Deep Medicine

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

The idea behind Thunder Bridge Capital and Deep Medicine 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.