Correlation Between Thrivent High and AAC Clyde

Can any of the company-specific risk be diversified away by investing in both Thrivent High and AAC Clyde 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 Thrivent High and AAC Clyde into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thrivent High Yield and AAC Clyde Space, you can compare the effects of market volatilities on Thrivent High and AAC Clyde 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 Thrivent High with a short position of AAC Clyde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and AAC Clyde.

Diversification Opportunities for Thrivent High and AAC Clyde

0.37

Correlation Coefficient

Thrivent High  AAC Clyde

Weak diversification

The 3 months correlation between Thrivent and AAC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and AAC Clyde Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Clyde Space and Thrivent High 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 Thrivent High Yield are associated (or correlated) with AAC Clyde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Clyde Space has no effect on the direction of Thrivent High i.e., Thrivent High and AAC Clyde go up and down completely randomly.

Pair Corralation between Thrivent High and AAC Clyde

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.13 times more return on investment than AAC Clyde. However, Thrivent High Yield is 7.57 times less risky than AAC Clyde. It trades about -0.12 of its potential returns per unit of risk. AAC Clyde Space is currently generating about -0.26 per unit of risk. If you would invest  415.00  in Thrivent High Yield on February 2, 2024 and sell it today you would lose (3.00) from holding Thrivent High Yield or give up 0.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Thrivent High Yield  vs.  AAC Clyde Space

Thrivent High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thrivent High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Thrivent High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AAC Clyde Space

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AAC Clyde Space has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Thrivent High and AAC Clyde

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

The idea behind Thrivent High Yield and AAC Clyde Space 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.