Correlation Between Thrivent High and Guinness Atkinson

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

Diversification Opportunities for Thrivent High and Guinness Atkinson

0.59

Correlation Coefficient

Thrivent High  Guinness Atkinson

Very weak diversification

The 3 months correlation between Thrivent and Guinness is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Guinness Atkinson Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Asset 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 Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Asset has no effect on the direction of Thrivent High i.e., Thrivent High and Guinness Atkinson go up and down completely randomly.

Pair Corralation between Thrivent High and Guinness Atkinson

Assuming the 90 days horizon Thrivent High is expected to generate 19.45 times less return on investment than Guinness Atkinson. But when comparing it to its historical volatility, Thrivent High Yield is 5.23 times less risky than Guinness Atkinson. It trades about 0.05 of its potential returns per unit of risk. Guinness Atkinson Asset is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,462  in Guinness Atkinson Asset on September 16, 2024 and sell it today you would earn a total of  76.00  from holding Guinness Atkinson Asset or generate 5.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	55.38%
Values	Daily Returns

Thrivent High Yield  vs.  Guinness Atkinson Asset

Thrivent High Yield

Risk-Adjusted Performance

3 of 100

Insignificant

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.

Guinness Atkinson Asset

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Guinness Atkinson Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather fragile basic indicators, Guinness Atkinson may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Thrivent High and Guinness Atkinson

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

The idea behind Thrivent High Yield and Guinness Atkinson Asset 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.