Correlation Between Therma Bright and StageZero Life

Can any of the company-specific risk be diversified away by investing in both Therma Bright and StageZero Life 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 Therma Bright and StageZero Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Therma Bright and StageZero Life Sciences, you can compare the effects of market volatilities on Therma Bright and StageZero Life 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 Therma Bright with a short position of StageZero Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Therma Bright and StageZero Life.

Diversification Opportunities for Therma Bright and StageZero Life

0.0

Correlation Coefficient

Therma Bright  StageZero Life

Pay attention - limited upside

The 3 months correlation between Therma and StageZero is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Therma Bright and StageZero Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StageZero Life Sciences and Therma Bright 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 Therma Bright are associated (or correlated) with StageZero Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StageZero Life Sciences has no effect on the direction of Therma Bright i.e., Therma Bright and StageZero Life go up and down completely randomly.

Pair Corralation between Therma Bright and StageZero Life

If you would invest  4.00  in StageZero Life Sciences on September 4, 2024 and sell it today you would earn a total of  0.00  from holding StageZero Life Sciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Therma Bright  vs.  StageZero Life Sciences

Therma Bright

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Therma Bright has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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.

StageZero Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days StageZero Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, StageZero Life is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Therma Bright and StageZero Life

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

The idea behind Therma Bright and StageZero Life Sciences 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..