Correlation Between Thrivent High and Matthews International

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

Diversification Opportunities for Thrivent High and Matthews International

-0.2

Correlation Coefficient

Thrivent High  Matthews International

Good diversification

The 3 months correlation between Thrivent and Matthews is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Matthews International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International 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 Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of Thrivent High i.e., Thrivent High and Matthews International go up and down completely randomly.

Pair Corralation between Thrivent High and Matthews International

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.12 times more return on investment than Matthews International. However, Thrivent High Yield is 8.65 times less risky than Matthews International. It trades about 0.2 of its potential returns per unit of risk. Matthews International is currently generating about -0.06 per unit of risk. If you would invest  384.00  in Thrivent High Yield on June 20, 2024 and sell it today you would earn a total of  44.00  from holding Thrivent High Yield or generate 11.46% return on investment over 90 days.

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

Thrivent High Yield  vs.  Matthews International

Thrivent High Yield

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 23 (%) 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.

Matthews International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Matthews International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Matthews International is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Thrivent High and Matthews International

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

The idea behind Thrivent High Yield and Matthews International 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.