Correlation Between Metal Sky and Thrivent High

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

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

Diversification Opportunities for Metal Sky and Thrivent High

0.45

Correlation Coefficient

Metal Sky  Thrivent High

Very weak diversification

The 3 months correlation between Metal and Thrivent is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Metal Sky Star 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 Metal Sky 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 Metal Sky Star 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 Metal Sky i.e., Metal Sky and Thrivent High go up and down completely randomly.

Pair Corralation between Metal Sky and Thrivent High

Given the investment horizon of 90 days Metal Sky is expected to generate 1.35 times less return on investment than Thrivent High. In addition to that, Metal Sky is 1.77 times more volatile than Thrivent High Yield. It trades about 0.06 of its total potential returns per unit of risk. Thrivent High Yield is currently generating about 0.15 per unit of volatility. If you would invest  373.00  in Thrivent High Yield on September 12, 2024 and sell it today you would earn a total of  54.00  from holding Thrivent High Yield or generate 14.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.7%
Values	Daily Returns

Metal Sky Star  vs.  Thrivent High Yield

Metal Sky Star

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Metal Sky Star are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Metal Sky is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Metal Sky and Thrivent High

The main advantage of trading using opposite Metal Sky and Thrivent High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metal Sky 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 Metal Sky Star 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.