Correlation Between Thrivent High and Cion Investment

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

Diversification Opportunities for Thrivent High and Cion Investment

-0.13

Correlation Coefficient

Thrivent High  Cion Investment

Good diversification

The 3 months correlation between Thrivent and Cion is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Cion Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cion Investment 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 Cion Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cion Investment Corp has no effect on the direction of Thrivent High i.e., Thrivent High and Cion Investment go up and down completely randomly.

Pair Corralation between Thrivent High and Cion Investment

Assuming the 90 days horizon Thrivent High Yield is expected to under-perform the Cion Investment. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent High Yield is 5.14 times less risky than Cion Investment. The mutual fund trades about -0.23 of its potential returns per unit of risk. The Cion Investment Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,140  in Cion Investment Corp on September 27, 2024 and sell it today you would earn a total of  12.00  from holding Cion Investment Corp or generate 1.05% return on investment over 90 days.

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

Thrivent High Yield  vs.  Cion Investment Corp

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.

Cion Investment Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Cion Investment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cion Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Thrivent High and Cion Investment

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

The idea behind Thrivent High Yield and Cion Investment Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.