Correlation Between Thrivent High and Sprott

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

Diversification Opportunities for Thrivent High and Sprott

0.0

Correlation Coefficient

Thrivent High  Sprott

Pay attention - limited upside

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

Pair Corralation between Thrivent High and Sprott

Assuming the 90 days horizon Thrivent High is expected to generate 1.92 times less return on investment than Sprott. But when comparing it to its historical volatility, Thrivent High Yield is 5.91 times less risky than Sprott. It trades about 0.1 of its potential returns per unit of risk. Sprott Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,304  in Sprott Inc on September 28, 2024 and sell it today you would earn a total of  891.00  from holding Sprott Inc or generate 26.97% return on investment over 90 days.

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

Thrivent High Yield  vs.  Sprott Inc

Thrivent High Yield

Risk-Adjusted Performance

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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.

Sprott Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprott Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Sprott is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Thrivent High and Sprott

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

The idea behind Thrivent High Yield and Sprott 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.