Correlation Between Thrivent High and APx Acquisition
Can any of the company-specific risk be diversified away by investing in both Thrivent High and APx Acquisition 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 APx Acquisition 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 APx Acquisition I, you can compare the effects of market volatilities on Thrivent High and APx Acquisition 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 APx Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and APx Acquisition.
Diversification Opportunities for Thrivent High and APx Acquisition
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thrivent and APx is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and APx Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APx Acquisition I 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 APx Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APx Acquisition I has no effect on the direction of Thrivent High i.e., Thrivent High and APx Acquisition go up and down completely randomly.
Pair Corralation between Thrivent High and APx Acquisition
Assuming the 90 days horizon Thrivent High is expected to generate 2.11 times less return on investment than APx Acquisition. But when comparing it to its historical volatility, Thrivent High Yield is 5.49 times less risky than APx Acquisition. It trades about 0.11 of its potential returns per unit of risk. APx Acquisition I is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,172 in APx Acquisition I on September 13, 2024 and sell it today you would earn a total of 16.00 from holding APx Acquisition I or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. APx Acquisition I
Performance |
| Timeline |
| Thrivent High Yield |
| APx Acquisition I |
Thrivent High and APx Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and APx Acquisition
The main advantage of trading using opposite Thrivent High and APx Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, APx Acquisition 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 APx Acquisition will offset losses from the drop in APx Acquisition's long position.| Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Income Fund | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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