Correlation Between Thrivent High and Global X

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

Diversification Opportunities for Thrivent High and Global X

0.69

Correlation Coefficient

Thrivent High  Global X

Poor diversification

The 3 months correlation between Thrivent and Global is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Global X Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Robotics 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Robotics has no effect on the direction of Thrivent High i.e., Thrivent High and Global X go up and down completely randomly.

Pair Corralation between Thrivent High and Global X

Assuming the 90 days horizon Thrivent High is expected to generate 17.55 times less return on investment than Global X. But when comparing it to its historical volatility, Thrivent High Yield is 7.25 times less risky than Global X. It trades about 0.05 of its potential returns per unit of risk. Global X Robotics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,047  in Global X Robotics on September 17, 2024 and sell it today you would earn a total of  255.00  from holding Global X Robotics or generate 8.37% return on investment over 90 days.

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

Thrivent High Yield  vs.  Global X Robotics

Thrivent High Yield

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 3 (%) 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.

Global X Robotics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Robotics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Thrivent High and Global X

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

The idea behind Thrivent High Yield and Global X Robotics 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.