Correlation Between Asm Pacific and Thrivent High

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

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

Diversification Opportunities for Asm Pacific and Thrivent High

-0.07

Correlation Coefficient

Asm Pacific  Thrivent High

Good diversification

The 3 months correlation between Asm and Thrivent is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Asm Pacific Technology 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 Asm Pacific 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 Asm Pacific Technology 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 Asm Pacific i.e., Asm Pacific and Thrivent High go up and down completely randomly.

Pair Corralation between Asm Pacific and Thrivent High

Assuming the 90 days horizon Asm Pacific Technology is expected to generate 10.98 times more return on investment than Thrivent High. However, Asm Pacific is 10.98 times more volatile than Thrivent High Yield. It trades about 0.01 of its potential returns per unit of risk. Thrivent High Yield is currently generating about 0.13 per unit of risk. If you would invest  2,883  in Asm Pacific Technology on October 4, 2024 and sell it today you would lose (12.00) from holding Asm Pacific Technology or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Asm Pacific Technology  vs.  Thrivent High Yield

Asm Pacific Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asm Pacific Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 Asm Pacific and Thrivent High

The main advantage of trading using opposite Asm Pacific and Thrivent High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asm Pacific 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 Asm Pacific Technology 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.