Correlation Between Thrivent High and Leafly Holdings

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

Diversification Opportunities for Thrivent High and Leafly Holdings

-0.3

Correlation Coefficient

Thrivent High  Leafly Holdings

Very good diversification

The 3 months correlation between Thrivent and Leafly is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Leafly Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafly Holdings 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 Leafly Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leafly Holdings has no effect on the direction of Thrivent High i.e., Thrivent High and Leafly Holdings go up and down completely randomly.

Pair Corralation between Thrivent High and Leafly Holdings

Assuming the 90 days horizon Thrivent High Yield is expected to under-perform the Leafly Holdings. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent High Yield is 43.59 times less risky than Leafly Holdings. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Leafly Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2.59  in Leafly Holdings on September 22, 2024 and sell it today you would lose (0.13) from holding Leafly Holdings or give up 5.02% of portfolio value over 90 days.

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

Thrivent High Yield  vs.  Leafly Holdings

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.

Leafly Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leafly Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Thrivent High and Leafly Holdings

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

The idea behind Thrivent High Yield and Leafly Holdings 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.