Correlation Between Thrivent High and Atlantic Union

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

Diversification Opportunities for Thrivent High and Atlantic Union

0.42

Correlation Coefficient

Thrivent High  Atlantic Union

Very weak diversification

The 3 months correlation between Thrivent and Atlantic is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Atlantic Union Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Union Bankshares 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 Atlantic Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Union Bankshares has no effect on the direction of Thrivent High i.e., Thrivent High and Atlantic Union go up and down completely randomly.

Pair Corralation between Thrivent High and Atlantic Union

Assuming the 90 days horizon Thrivent High is expected to generate 33.06 times less return on investment than Atlantic Union. But when comparing it to its historical volatility, Thrivent High Yield is 22.47 times less risky than Atlantic Union. It trades about 0.15 of its potential returns per unit of risk. Atlantic Union Bankshares is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  3,674  in Atlantic Union Bankshares on September 5, 2024 and sell it today you would earn a total of  605.00  from holding Atlantic Union Bankshares or generate 16.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Thrivent High Yield  vs.  Atlantic Union Bankshares

Thrivent High Yield

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 9 (%) 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.

Atlantic Union Bankshares

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantic Union Bankshares are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Atlantic Union sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thrivent High and Atlantic Union

The main advantage of trading using opposite Thrivent High and Atlantic Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Atlantic Union 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 Atlantic Union will offset losses from the drop in Atlantic Union's long position.

The idea behind Thrivent High Yield and Atlantic Union Bankshares 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.