Correlation Between Thrivent High and Saker Aviation

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

Diversification Opportunities for Thrivent High and Saker Aviation

-0.62

Correlation Coefficient

Thrivent High  Saker Aviation

Excellent diversification

The 3 months correlation between Thrivent and Saker is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Saker Aviation Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saker Aviation Services 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 Saker Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saker Aviation Services has no effect on the direction of Thrivent High i.e., Thrivent High and Saker Aviation go up and down completely randomly.

Pair Corralation between Thrivent High and Saker Aviation

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.03 times more return on investment than Saker Aviation. However, Thrivent High Yield is 34.15 times less risky than Saker Aviation. It trades about 0.05 of its potential returns per unit of risk. Saker Aviation Services is currently generating about -0.06 per unit of risk. If you would invest  423.00  in Thrivent High Yield on September 15, 2024 and sell it today you would earn a total of  2.00  from holding Thrivent High Yield or generate 0.47% return on investment over 90 days.

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

Thrivent High Yield  vs.  Saker Aviation Services

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.

Saker Aviation Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saker Aviation Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Thrivent High and Saker Aviation

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

The idea behind Thrivent High Yield and Saker Aviation Services 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.