Correlation Between Thrivent High and FFW

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

Diversification Opportunities for Thrivent High and FFW

0.11

Correlation Coefficient

Thrivent High  FFW

Average diversification

The 3 months correlation between Thrivent and FFW is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and FFW Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FFW Corporation 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 FFW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FFW Corporation has no effect on the direction of Thrivent High i.e., Thrivent High and FFW go up and down completely randomly.

Pair Corralation between Thrivent High and FFW

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.15 times more return on investment than FFW. However, Thrivent High Yield is 6.73 times less risky than FFW. It trades about -0.06 of its potential returns per unit of risk. FFW Corporation is currently generating about -0.1 per unit of risk. If you would invest  424.00  in Thrivent High Yield on September 20, 2024 and sell it today you would lose (1.00) from holding Thrivent High Yield or give up 0.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Thrivent High Yield  vs.  FFW 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.

FFW Corporation

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FFW Corporation are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, FFW may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Thrivent High and FFW

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

The idea behind Thrivent High Yield and FFW Corporation 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.