Correlation Between Thrivent High and US Gold

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

Diversification Opportunities for Thrivent High and US Gold

0.71

Correlation Coefficient

Thrivent High  US Gold

Poor diversification

The 3 months correlation between Thrivent and USAU is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and US Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Gold Corp 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 US Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Gold Corp has no effect on the direction of Thrivent High i.e., Thrivent High and US Gold go up and down completely randomly.

Pair Corralation between Thrivent High and US Gold

Assuming the 90 days horizon Thrivent High is expected to generate 27.39 times less return on investment than US Gold. But when comparing it to its historical volatility, Thrivent High Yield is 21.64 times less risky than US Gold. It trades about 0.16 of its potential returns per unit of risk. US Gold Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  643.00  in US Gold Corp on December 22, 2024 and sell it today you would earn a total of  393.00  from holding US Gold Corp or generate 61.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Thrivent High Yield  vs.  US Gold Corp

Thrivent High Yield

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 12 (%) 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.

US Gold Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in US Gold Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, US Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thrivent High and US Gold

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

The idea behind Thrivent High Yield and US Gold Corp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.