Correlation Between Thrivent High and Carlyle

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

Diversification Opportunities for Thrivent High and Carlyle

0.22

Correlation Coefficient

Thrivent High  Carlyle

Modest diversification

The 3 months correlation between Thrivent and Carlyle is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Thrivent High i.e., Thrivent High and Carlyle go up and down completely randomly.

Pair Corralation between Thrivent High and Carlyle

Assuming the 90 days horizon Thrivent High Yield is expected to under-perform the Carlyle. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent High Yield is 12.52 times less risky than Carlyle. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,249  in Carlyle Group on September 26, 2024 and sell it today you would earn a total of  766.00  from holding Carlyle Group or generate 18.03% return on investment over 90 days.

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

Thrivent High Yield  vs.  Carlyle Group

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.

Carlyle Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thrivent High and Carlyle

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

The idea behind Thrivent High Yield and Carlyle Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.