Correlation Between Thrivent High and WinVest Acquisition

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

Diversification Opportunities for Thrivent High and WinVest Acquisition

0.02

Correlation Coefficient

Thrivent High  WinVest Acquisition

Significant diversification

The 3 months correlation between Thrivent and WinVest is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and WinVest Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WinVest Acquisition 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 WinVest Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WinVest Acquisition Corp has no effect on the direction of Thrivent High i.e., Thrivent High and WinVest Acquisition go up and down completely randomly.

Pair Corralation between Thrivent High and WinVest Acquisition

Assuming the 90 days horizon Thrivent High is expected to generate 4.16 times less return on investment than WinVest Acquisition. But when comparing it to its historical volatility, Thrivent High Yield is 7.54 times less risky than WinVest Acquisition. It trades about 0.14 of its potential returns per unit of risk. WinVest Acquisition Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,170  in WinVest Acquisition Corp on September 26, 2024 and sell it today you would earn a total of  160.00  from holding WinVest Acquisition Corp or generate 13.68% 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.  WinVest Acquisition Corp

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.

WinVest Acquisition Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WinVest Acquisition Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, WinVest Acquisition may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Thrivent High and WinVest Acquisition

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

The idea behind Thrivent High Yield and WinVest Acquisition 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.