Correlation Between Thrivent High and First Physicians

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

Diversification Opportunities for Thrivent High and First Physicians

0.0

Correlation Coefficient

Thrivent High  First Physicians

Pay attention - limited upside

The 3 months correlation between Thrivent and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and First Physicians Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Physicians Capital 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 First Physicians. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Physicians Capital has no effect on the direction of Thrivent High i.e., Thrivent High and First Physicians go up and down completely randomly.

Pair Corralation between Thrivent High and First Physicians

If you would invest  414.00  in Thrivent High Yield on December 23, 2024 and sell it today you would earn a total of  8.00  from holding Thrivent High Yield or generate 1.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

Thrivent High Yield  vs.  First Physicians Capital

Thrivent High Yield

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 12 (%) 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.

First Physicians Capital

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Thrivent High and First Physicians

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

The idea behind Thrivent High Yield and First Physicians Capital 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.