Correlation Between Thrivent High and PTC

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

Diversification Opportunities for Thrivent High and PTC

0.58

Correlation Coefficient

Thrivent High  PTC

Very weak diversification

The 3 months correlation between Thrivent and PTC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and PTC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC Inc 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 PTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC Inc has no effect on the direction of Thrivent High i.e., Thrivent High and PTC go up and down completely randomly.

Pair Corralation between Thrivent High and PTC

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.16 times more return on investment than PTC. However, Thrivent High Yield is 6.13 times less risky than PTC. It trades about -0.24 of its potential returns per unit of risk. PTC Inc is currently generating about -0.34 per unit of risk. If you would invest  427.00  in Thrivent High Yield on October 6, 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	Weak
Accuracy	100.0%
Values	Daily Returns

Thrivent High Yield  vs.  PTC Inc

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.

PTC Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PTC Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, PTC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Thrivent High and PTC

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

The idea behind Thrivent High Yield and PTC Inc 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.