Correlation Between Thrivent High and Horizon Technology

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

Diversification Opportunities for Thrivent High and Horizon Technology

-0.11

Correlation Coefficient

Thrivent High  Horizon Technology

Good diversification

The 3 months correlation between Thrivent and Horizon is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Horizon Technology Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon 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 Horizon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Technology has no effect on the direction of Thrivent High i.e., Thrivent High and Horizon Technology go up and down completely randomly.

Pair Corralation between Thrivent High and Horizon Technology

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.13 times more return on investment than Horizon Technology. However, Thrivent High Yield is 7.6 times less risky than Horizon Technology. It trades about -0.06 of its potential returns per unit of risk. Horizon Technology Finance is currently generating about -0.16 per unit of risk. If you would invest  424.00  in Thrivent High Yield on September 27, 2024 and sell it today you would lose (3.00) from holding Thrivent High Yield or give up 0.71% of portfolio value over 90 days.

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

Thrivent High Yield  vs.  Horizon Technology Finance

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.

Horizon Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Horizon Technology Finance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Thrivent High and Horizon Technology

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

The idea behind Thrivent High Yield and Horizon Technology Finance 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 Commodity Directory module to find actively traded commodities issued by global exchanges.