Correlation Between Thrivent High and Caldwell Partners

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

Diversification Opportunities for Thrivent High and Caldwell Partners

-0.03

Correlation Coefficient

Thrivent High  Caldwell Partners

Good diversification

The 3 months correlation between Thrivent and Caldwell is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and The Caldwell Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldwell Partners 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 Caldwell Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldwell Partners has no effect on the direction of Thrivent High i.e., Thrivent High and Caldwell Partners go up and down completely randomly.

Pair Corralation between Thrivent High and Caldwell Partners

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.04 times more return on investment than Caldwell Partners. However, Thrivent High Yield is 23.21 times less risky than Caldwell Partners. It trades about 0.05 of its potential returns per unit of risk. The Caldwell Partners is currently generating about -0.01 per unit of risk. If you would invest  423.00  in Thrivent High Yield on September 17, 2024 and sell it today you would earn a total of  2.00  from holding Thrivent High Yield or generate 0.47% 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.  The Caldwell Partners

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.

Caldwell Partners

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days The Caldwell Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Caldwell Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Thrivent High and Caldwell Partners

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

The idea behind Thrivent High Yield and The Caldwell Partners 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.