Correlation Between Queens Road and Thrivent Opportunity

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

By analyzing existing cross correlation between Queens Road Small and Thrivent Opportunity Income, you can compare the effects of market volatilities on Queens Road and Thrivent Opportunity 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 Queens Road with a short position of Thrivent Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queens Road and Thrivent Opportunity.

Diversification Opportunities for Queens Road and Thrivent Opportunity

0.4

Correlation Coefficient

Queens Road  Thrivent Opportunity

Very weak diversification

The 3 months correlation between Queens and Thrivent is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Small and Thrivent Opportunity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Opportunity and Queens Road 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 Queens Road Small are associated (or correlated) with Thrivent Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Opportunity has no effect on the direction of Queens Road i.e., Queens Road and Thrivent Opportunity go up and down completely randomly.

Pair Corralation between Queens Road and Thrivent Opportunity

Assuming the 90 days horizon Queens Road Small is expected to under-perform the Thrivent Opportunity. In addition to that, Queens Road is 4.87 times more volatile than Thrivent Opportunity Income. It trades about -0.15 of its total potential returns per unit of risk. Thrivent Opportunity Income is currently generating about 0.18 per unit of volatility. If you would invest  905.00  in Thrivent Opportunity Income on December 2, 2024 and sell it today you would earn a total of  6.00  from holding Thrivent Opportunity Income or generate 0.66% return on investment over 90 days.

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

Queens Road Small  vs.  Thrivent Opportunity Income

Queens Road Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Queens Road Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Thrivent Opportunity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Opportunity Income are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Thrivent Opportunity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Queens Road and Thrivent Opportunity

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

The idea behind Queens Road Small and Thrivent Opportunity Income 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.