Correlation Between Thrivent High and Tile Shop

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

Diversification Opportunities for Thrivent High and Tile Shop

0.17

Correlation Coefficient

Thrivent High  Tile Shop

Average diversification

The 3 months correlation between Thrivent and Tile is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Tile Shop Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tile Shop Holdings 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 Tile Shop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tile Shop Holdings has no effect on the direction of Thrivent High i.e., Thrivent High and Tile Shop go up and down completely randomly.

Pair Corralation between Thrivent High and Tile Shop

Assuming the 90 days horizon Thrivent High Yield is expected to under-perform the Tile Shop. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent High Yield is 6.44 times less risky than Tile Shop. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Tile Shop Holdings is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  626.00  in Tile Shop Holdings on September 21, 2024 and sell it today you would earn a total of  53.00  from holding Tile Shop Holdings or generate 8.47% return on investment over 90 days.

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

Thrivent High Yield  vs.  Tile Shop Holdings

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.

Tile Shop Holdings

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tile Shop Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Tile Shop 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 Tile Shop

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

The idea behind Thrivent High Yield and Tile Shop Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.