Correlation Between Thrivent High and FutureFuel Corp
Can any of the company-specific risk be diversified away by investing in both Thrivent High and FutureFuel Corp 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 FutureFuel Corp 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 FutureFuel Corp, you can compare the effects of market volatilities on Thrivent High and FutureFuel Corp 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 FutureFuel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and FutureFuel Corp.
Diversification Opportunities for Thrivent High and FutureFuel Corp
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thrivent and FutureFuel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and FutureFuel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FutureFuel Corp 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 FutureFuel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FutureFuel Corp has no effect on the direction of Thrivent High i.e., Thrivent High and FutureFuel Corp go up and down completely randomly.
Pair Corralation between Thrivent High and FutureFuel Corp
Assuming the 90 days horizon Thrivent High is expected to generate 4.08 times less return on investment than FutureFuel Corp. But when comparing it to its historical volatility, Thrivent High Yield is 12.59 times less risky than FutureFuel Corp. It trades about 0.16 of its potential returns per unit of risk. FutureFuel Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 398.00 in FutureFuel Corp on September 3, 2024 and sell it today you would earn a total of 131.00 from holding FutureFuel Corp or generate 32.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. FutureFuel Corp
Performance |
| Timeline |
| Thrivent High Yield |
| FutureFuel Corp |
Thrivent High and FutureFuel Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and FutureFuel Corp
The main advantage of trading using opposite Thrivent High and FutureFuel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, FutureFuel Corp 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 FutureFuel Corp will offset losses from the drop in FutureFuel Corp'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 |
| FutureFuel Corp vs. SPACE | FutureFuel Corp vs. Bayview Acquisition Corp | FutureFuel Corp vs. T Rowe Price | FutureFuel Corp vs. Ampleforth |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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