Correlation Between Thrivent High and Virtus Global

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

Diversification Opportunities for Thrivent High and Virtus Global

-0.23

Correlation Coefficient

Thrivent High  Virtus Global

Very good diversification

The 3 months correlation between Thrivent and Virtus is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Virtus Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Global Real 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 Virtus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Global Real has no effect on the direction of Thrivent High i.e., Thrivent High and Virtus Global go up and down completely randomly.

Pair Corralation between Thrivent High and Virtus Global

Assuming the 90 days horizon Thrivent High is expected to generate 1.11 times less return on investment than Virtus Global. But when comparing it to its historical volatility, Thrivent High Yield is 3.2 times less risky than Virtus Global. It trades about 0.12 of its potential returns per unit of risk. Virtus Global Real is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,861  in Virtus Global Real on September 12, 2024 and sell it today you would earn a total of  536.00  from holding Virtus Global Real or generate 18.73% return on investment over 90 days.

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

Thrivent High Yield  vs.  Virtus Global Real

Thrivent High Yield

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 11 (%) 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.

Virtus Global Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Virtus Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thrivent High and Virtus Global

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

The idea behind Thrivent High Yield and Virtus Global Real 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.