Correlation Between Thrivent High and SGS SA

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

Diversification Opportunities for Thrivent High and SGS SA

-0.55

Correlation Coefficient

Thrivent High  SGS SA

Excellent diversification

The 3 months correlation between Thrivent and SGS is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of Thrivent High i.e., Thrivent High and SGS SA go up and down completely randomly.

Pair Corralation between Thrivent High and SGS SA

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.2 times more return on investment than SGS SA. However, Thrivent High Yield is 4.97 times less risky than SGS SA. It trades about 0.1 of its potential returns per unit of risk. SGS SA is currently generating about 0.01 per unit of risk. If you would invest  367.00  in Thrivent High Yield on October 23, 2024 and sell it today you would earn a total of  57.00  from holding Thrivent High Yield or generate 15.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Thrivent High Yield  vs.  SGS SA

Thrivent High Yield

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 10 (%) 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.

SGS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SGS SA 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 basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Thrivent High and SGS SA

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

The idea behind Thrivent High Yield and SGS SA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.