Correlation Between Thrivent High and Elfun Income

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

Diversification Opportunities for Thrivent High and Elfun Income

-0.23
  Correlation Coefficient

Very good diversification

The 3 months correlation between Thrivent and Elfun is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Elfun Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Income 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 Elfun Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Income has no effect on the direction of Thrivent High i.e., Thrivent High and Elfun Income go up and down completely randomly.

Pair Corralation between Thrivent High and Elfun Income

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.6 times more return on investment than Elfun Income. However, Thrivent High Yield is 1.67 times less risky than Elfun Income. It trades about 0.15 of its potential returns per unit of risk. Elfun Income Fund is currently generating about 0.06 per unit of risk. If you would invest  373.00  in Thrivent High Yield on September 12, 2024 and sell it today you would earn a total of  54.00  from holding Thrivent High Yield or generate 14.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Thrivent High Yield  vs.  Elfun Income Fund

 Performance 
       Timeline  
Thrivent High Yield 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 11 (%) 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.
Elfun Income 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Elfun Income Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Elfun Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thrivent High and Elfun Income Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Thrivent High and Elfun Income

The main advantage of trading using opposite Thrivent High and Elfun Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Elfun Income 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 Elfun Income will offset losses from the drop in Elfun Income's long position.
The idea behind Thrivent High Yield and Elfun Income Fund 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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