Correlation Between Nutanix and Thrivent High

Can any of the company-specific risk be diversified away by investing in both Nutanix and Thrivent High 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 Nutanix and Thrivent High into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nutanix and Thrivent High Yield, you can compare the effects of market volatilities on Nutanix and Thrivent High 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 Nutanix with a short position of Thrivent High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nutanix and Thrivent High.

Diversification Opportunities for Nutanix and Thrivent High

0.3

Correlation Coefficient

Nutanix  Thrivent High

Weak diversification

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

Pair Corralation between Nutanix and Thrivent High

Given the investment horizon of 90 days Nutanix is expected to generate 14.03 times more return on investment than Thrivent High. However, Nutanix is 14.03 times more volatile than Thrivent High Yield. It trades about 0.06 of its potential returns per unit of risk. Thrivent High Yield is currently generating about -0.04 per unit of risk. If you would invest  6,064  in Nutanix on September 24, 2024 and sell it today you would earn a total of  443.00  from holding Nutanix or generate 7.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Nutanix  vs.  Thrivent High Yield

Nutanix

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nutanix may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Nutanix and Thrivent High

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

The idea behind Nutanix and Thrivent High Yield 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.