Correlation Between Thrivent High and Monitor Ventures

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

Diversification Opportunities for Thrivent High and Monitor Ventures

-0.43

Correlation Coefficient

Thrivent High  Monitor Ventures

Very good diversification

The 3 months correlation between Thrivent and Monitor is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Monitor Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monitor Ventures 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 Monitor Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monitor Ventures has no effect on the direction of Thrivent High i.e., Thrivent High and Monitor Ventures go up and down completely randomly.

Pair Corralation between Thrivent High and Monitor Ventures

Assuming the 90 days horizon Thrivent High is expected to generate 1.53 times less return on investment than Monitor Ventures. But when comparing it to its historical volatility, Thrivent High Yield is 6.89 times less risky than Monitor Ventures. It trades about 0.18 of its potential returns per unit of risk. Monitor Ventures is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Monitor Ventures on September 15, 2024 and sell it today you would earn a total of  1.03  from holding Monitor Ventures or generate 14.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.63%
Values	Daily Returns

Thrivent High Yield  vs.  Monitor Ventures

Thrivent High Yield

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 3 (%) 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.

Monitor Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monitor Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Thrivent High and Monitor Ventures

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

The idea behind Thrivent High Yield and Monitor Ventures 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..