Correlation Between Thrivent High and Korea Closed

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

Diversification Opportunities for Thrivent High and Korea Closed

0.75

Correlation Coefficient

Thrivent High  Korea Closed

Poor diversification

The 3 months correlation between Thrivent and Korea is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Korea Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Closed 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 Korea Closed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Closed has no effect on the direction of Thrivent High i.e., Thrivent High and Korea Closed go up and down completely randomly.

Pair Corralation between Thrivent High and Korea Closed

Assuming the 90 days horizon Thrivent High is expected to generate 3.1 times less return on investment than Korea Closed. But when comparing it to its historical volatility, Thrivent High Yield is 4.67 times less risky than Korea Closed. It trades about 0.1 of its potential returns per unit of risk. Korea Closed is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,304  in Korea Closed on February 18, 2024 and sell it today you would earn a total of  98.00  from holding Korea Closed or generate 4.25% return on investment over 90 days.

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

Thrivent High Yield  vs.  Korea Closed

Thrivent High Yield

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 7 (%) 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.

Korea Closed

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Korea Closed are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable technical and fundamental indicators, Korea Closed is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Thrivent High and Korea Closed

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

The idea behind Thrivent High Yield and Korea Closed 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.