Correlation Between Thrivent High and Mullen Automotive

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

Diversification Opportunities for Thrivent High and Mullen Automotive

0.38

Correlation Coefficient

Thrivent High  Mullen Automotive

Weak diversification

The 3 months correlation between Thrivent and Mullen is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Mullen Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Automotive 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 Mullen Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Automotive has no effect on the direction of Thrivent High i.e., Thrivent High and Mullen Automotive go up and down completely randomly.

Pair Corralation between Thrivent High and Mullen Automotive

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.02 times more return on investment than Mullen Automotive. However, Thrivent High Yield is 40.49 times less risky than Mullen Automotive. It trades about -0.24 of its potential returns per unit of risk. Mullen Automotive is currently generating about -0.5 per unit of risk. If you would invest  427.00  in Thrivent High Yield on October 10, 2024 and sell it today you would lose (4.00) from holding Thrivent High Yield or give up 0.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Thrivent High Yield  vs.  Mullen Automotive

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.

Mullen Automotive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mullen Automotive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Thrivent High and Mullen Automotive

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

The idea behind Thrivent High Yield and Mullen Automotive 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.