Correlation Between Magna International and THRIVENT PARTNER

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Can any of the company-specific risk be diversified away by investing in both Magna International and THRIVENT PARTNER 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 Magna International and THRIVENT PARTNER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magna International and THRIVENT PARTNER WORLDWIDE, you can compare the effects of market volatilities on Magna International and THRIVENT PARTNER 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 Magna International with a short position of THRIVENT PARTNER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magna International and THRIVENT PARTNER.

Diversification Opportunities for Magna International and THRIVENT PARTNER

0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Magna and THRIVENT is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Magna International and THRIVENT PARTNER WORLDWIDE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRIVENT PARTNER WOR and Magna International 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 Magna International are associated (or correlated) with THRIVENT PARTNER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRIVENT PARTNER WOR has no effect on the direction of Magna International i.e., Magna International and THRIVENT PARTNER go up and down completely randomly.

Pair Corralation between Magna International and THRIVENT PARTNER

Considering the 90-day investment horizon Magna International is expected to generate 2.21 times more return on investment than THRIVENT PARTNER. However, Magna International is 2.21 times more volatile than THRIVENT PARTNER WORLDWIDE. It trades about 0.0 of its potential returns per unit of risk. THRIVENT PARTNER WORLDWIDE is currently generating about 0.0 per unit of risk. If you would invest  7,357  in Magna International on October 29, 2022 and sell it today you would lose (966.50)  from holding Magna International or give up 13.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.8%
ValuesDaily Returns

Magna International  vs.  THRIVENT PARTNER WORLDWIDE

 Performance (%) 
       Timeline  
Magna International 
Magna Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Magna International are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal technical and fundamental indicators, Magna International sustained solid returns over the last few months and may actually be approaching a breakup point.

Magna Price Channel

THRIVENT PARTNER WOR 
THRIVENT Performance
18 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in THRIVENT PARTNER WORLDWIDE are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, THRIVENT PARTNER showed solid returns over the last few months and may actually be approaching a breakup point.

THRIVENT Price Channel

Magna International and THRIVENT PARTNER Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Magna International and THRIVENT PARTNER

The main advantage of trading using opposite Magna International and THRIVENT PARTNER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magna International position performs unexpectedly, THRIVENT PARTNER 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 PARTNER will offset losses from the drop in THRIVENT PARTNER's long position.
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The idea behind Magna International and THRIVENT PARTNER WORLDWIDE 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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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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