Correlation Between Malaga Financial and Thrivent Natural

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

By analyzing existing cross correlation between Malaga Financial and Thrivent Natural Resources, you can compare the effects of market volatilities on Malaga Financial and Thrivent Natural 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 Malaga Financial with a short position of Thrivent Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malaga Financial and Thrivent Natural.

Diversification Opportunities for Malaga Financial and Thrivent Natural

0.31

Correlation Coefficient

Malaga Financial  Thrivent Natural

Weak diversification

The 3 months correlation between Malaga and Thrivent is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Malaga Financial and Thrivent Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Natural Res and Malaga Financial 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 Malaga Financial are associated (or correlated) with Thrivent Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Natural Res has no effect on the direction of Malaga Financial i.e., Malaga Financial and Thrivent Natural go up and down completely randomly.

Pair Corralation between Malaga Financial and Thrivent Natural

Given the investment horizon of 90 days Malaga Financial is expected to generate 20.99 times more return on investment than Thrivent Natural. However, Malaga Financial is 20.99 times more volatile than Thrivent Natural Resources. It trades about 0.02 of its potential returns per unit of risk. Thrivent Natural Resources is currently generating about 0.1 per unit of risk. If you would invest  2,277  in Malaga Financial on October 20, 2024 and sell it today you would lose (147.00) from holding Malaga Financial or give up 6.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	82.22%
Values	Daily Returns

Malaga Financial  vs.  Thrivent Natural Resources

Malaga Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Malaga Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Malaga Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Thrivent Natural Res

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Natural Resources are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thrivent Natural is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Malaga Financial and Thrivent Natural

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

The idea behind Malaga Financial and Thrivent Natural Resources 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 CEOs Directory module to screen CEOs from public companies around the world.