Correlation Between Thrivent High and Cabana Target

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

Diversification Opportunities for Thrivent High and Cabana Target

0.3

Correlation Coefficient

Thrivent High  Cabana Target

Weak diversification

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

Pair Corralation between Thrivent High and Cabana Target

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.63 times more return on investment than Cabana Target. However, Thrivent High Yield is 1.6 times less risky than Cabana Target. It trades about 0.08 of its potential returns per unit of risk. Cabana Target Drawdown is currently generating about -0.15 per unit of risk. If you would invest  421.00  in Thrivent High Yield on October 26, 2024 and sell it today you would earn a total of  3.00  from holding Thrivent High Yield or generate 0.71% return on investment over 90 days.

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

Thrivent High Yield  vs.  Cabana Target Drawdown

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.

Cabana Target Drawdown

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cabana Target Drawdown has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cabana Target is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thrivent High and Cabana Target

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

The idea behind Thrivent High Yield and Cabana Target Drawdown 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.