Correlation Between Thrivent High and Brooge Energy

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

Diversification Opportunities for Thrivent High and Brooge Energy

-0.37

Correlation Coefficient

Thrivent High  Brooge Energy

Very good diversification

The 3 months correlation between Thrivent and Brooge is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Brooge Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooge Energy Limited 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 Brooge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooge Energy Limited has no effect on the direction of Thrivent High i.e., Thrivent High and Brooge Energy go up and down completely randomly.

Pair Corralation between Thrivent High and Brooge Energy

Assuming the 90 days horizon Thrivent High is expected to generate 265.2 times less return on investment than Brooge Energy. But when comparing it to its historical volatility, Thrivent High Yield is 268.12 times less risky than Brooge Energy. It trades about 0.13 of its potential returns per unit of risk. Brooge Energy Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.43  in Brooge Energy Limited on September 13, 2024 and sell it today you would lose (0.23) from holding Brooge Energy Limited or give up 53.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.73%
Values	Daily Returns

Thrivent High Yield  vs.  Brooge Energy Limited

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.

Brooge Energy Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brooge Energy Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Brooge Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thrivent High and Brooge Energy

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

The idea behind Thrivent High Yield and Brooge Energy Limited 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.