Correlation Between Thrivent High and Inspire Medical

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

Diversification Opportunities for Thrivent High and Inspire Medical

-0.64

Correlation Coefficient

Thrivent High  Inspire Medical

Excellent diversification

The 3 months correlation between Thrivent and Inspire is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Inspire Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Medical Systems 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 Inspire Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Medical Systems has no effect on the direction of Thrivent High i.e., Thrivent High and Inspire Medical go up and down completely randomly.

Pair Corralation between Thrivent High and Inspire Medical

Assuming the 90 days horizon Thrivent High is expected to generate 1.73 times less return on investment than Inspire Medical. But when comparing it to its historical volatility, Thrivent High Yield is 17.25 times less risky than Inspire Medical. It trades about 0.09 of its potential returns per unit of risk. Inspire Medical Systems is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  18,455  in Inspire Medical Systems on March 19, 2024 and sell it today you would lose (1,783) from holding Inspire Medical Systems or give up 9.66% of portfolio value over 90 days.

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

Thrivent High Yield  vs.  Inspire Medical Systems

Thrivent High Yield

Risk-Adjusted Performance

7 of 100

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.

Inspire Medical Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inspire Medical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Thrivent High and Inspire Medical

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

The idea behind Thrivent High Yield and Inspire Medical Systems 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.