Correlation Between Thrivent High and Global Blockchain

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

Diversification Opportunities for Thrivent High and Global Blockchain

0.3

Correlation Coefficient

Thrivent High  Global Blockchain

Weak diversification

The 3 months correlation between Thrivent and Global is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Global Blockchain Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Blockchain 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 Global Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Blockchain has no effect on the direction of Thrivent High i.e., Thrivent High and Global Blockchain go up and down completely randomly.

Pair Corralation between Thrivent High and Global Blockchain

Assuming the 90 days horizon Thrivent High Yield is expected to under-perform the Global Blockchain. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent High Yield is 3.06 times less risky than Global Blockchain. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Global Blockchain Acquisition is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,104  in Global Blockchain Acquisition on September 28, 2024 and sell it today you would earn a total of  2.00  from holding Global Blockchain Acquisition or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Thrivent High Yield  vs.  Global Blockchain Acquisition

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.

Global Blockchain

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Global Blockchain Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Global Blockchain is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Thrivent High and Global Blockchain

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

The idea behind Thrivent High Yield and Global Blockchain Acquisition 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.