Correlation Between Thrivent High and Color Star

Can any of the company-specific risk be diversified away by investing in both Thrivent High and Color Star 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 Color Star 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 Color Star Technology, you can compare the effects of market volatilities on Thrivent High and Color Star 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 Color Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Color Star.

Diversification Opportunities for Thrivent High and Color Star

0.0

Correlation Coefficient

Thrivent High  Color Star

Pay attention - limited upside

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

Pair Corralation between Thrivent High and Color Star

Assuming the 90 days horizon Thrivent High is expected to generate 2.29 times less return on investment than Color Star. But when comparing it to its historical volatility, Thrivent High Yield is 21.29 times less risky than Color Star. It trades about 0.07 of its potential returns per unit of risk. Color Star Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Color Star Technology on February 28, 2024 and sell it today you would lose (1.49) from holding Color Star Technology or give up 5.14% of portfolio value over 90 days.

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

Thrivent High Yield  vs.  Color Star Technology

Thrivent High Yield

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. 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.

Color Star Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Color Star Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Color Star is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Thrivent High and Color Star

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

The idea behind Thrivent High Yield and Color Star Technology 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.

Check out your portfolio center.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.