Correlation Between Great Elm and Thrivent High
Can any of the company-specific risk be diversified away by investing in both Great Elm 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 Great Elm and Thrivent High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Elm Capital and Thrivent High Yield, you can compare the effects of market volatilities on Great Elm 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 Great Elm with a short position of Thrivent High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Elm and Thrivent High.
Diversification Opportunities for Great Elm and Thrivent High
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and Thrivent is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Capital 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 Great Elm 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 Great Elm Capital 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 Great Elm i.e., Great Elm and Thrivent High go up and down completely randomly.
Pair Corralation between Great Elm and Thrivent High
Assuming the 90 days horizon Great Elm Capital is expected to under-perform the Thrivent High. In addition to that, Great Elm is 1.36 times more volatile than Thrivent High Yield. It trades about -0.1 of its total potential returns per unit of risk. Thrivent High Yield is currently generating about 0.22 per unit of volatility. If you would invest 423.00 in Thrivent High Yield on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Thrivent High Yield or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Elm Capital vs. Thrivent High Yield
Performance |
| Timeline |
| Great Elm Capital |
| Thrivent High Yield |
Great Elm and Thrivent High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Elm and Thrivent High
The main advantage of trading using opposite Great Elm and Thrivent High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm 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 Great Elm Capital 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.| Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Opportunity Income |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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