Correlation Between Mill City and Thrivent High

Can any of the company-specific risk be diversified away by investing in both Mill City and Thrivent High 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 Mill City and Thrivent High into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mill City Ventures and Thrivent High Yield, you can compare the effects of market volatilities on Mill City and Thrivent High 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 Mill City with a short position of Thrivent High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and Thrivent High.

Diversification Opportunities for Mill City and Thrivent High

0.22

Correlation Coefficient

Mill City  Thrivent High

Modest diversification

The 3 months correlation between Mill and Thrivent is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Thrivent High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent High Yield and Mill City 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 Mill City Ventures are associated (or correlated) with Thrivent High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent High Yield has no effect on the direction of Mill City i.e., Mill City and Thrivent High go up and down completely randomly.

Pair Corralation between Mill City and Thrivent High

Given the investment horizon of 90 days Mill City Ventures is expected to generate 38.53 times more return on investment than Thrivent High. However, Mill City is 38.53 times more volatile than Thrivent High Yield. It trades about 0.03 of its potential returns per unit of risk. Thrivent High Yield is currently generating about 0.1 per unit of risk. If you would invest  200.00  in Mill City Ventures on December 1, 2024 and sell it today you would lose (3.00) from holding Mill City Ventures or give up 1.5% of portfolio value over 90 days.

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

Mill City Ventures  vs.  Thrivent High Yield

Mill City Ventures

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mill City Ventures are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mill City unveiled solid returns over the last few months and may actually be approaching a breakup point.

Thrivent High Yield

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 7 (%) 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.

Pair Trading with Mill City and Thrivent High

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

The idea behind Mill City Ventures and Thrivent High Yield 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.