Correlation Between Thrivent High and Denali Capital

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

Diversification Opportunities for Thrivent High and Denali Capital

0.23

Correlation Coefficient

Thrivent High  Denali Capital

Modest diversification

The 3 months correlation between Thrivent and Denali is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Denali Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denali Capital Acqui 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 Denali Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denali Capital Acqui has no effect on the direction of Thrivent High i.e., Thrivent High and Denali Capital go up and down completely randomly.

Pair Corralation between Thrivent High and Denali Capital

Assuming the 90 days horizon Thrivent High Yield is expected to under-perform the Denali Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent High Yield is 142.85 times less risky than Denali Capital. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Denali Capital Acquisition is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6.00  in Denali Capital Acquisition on September 26, 2024 and sell it today you would earn a total of  1.00  from holding Denali Capital Acquisition or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	47.62%
Values	Daily Returns

Thrivent High Yield  vs.  Denali Capital Acquisition

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.

Denali Capital Acqui

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Thrivent High and Denali Capital

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

The idea behind Thrivent High Yield and Denali Capital Acquisition 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.