Correlation Between Amazon and Thrivent Opportunity
Can any of the company-specific risk be diversified away by investing in both Amazon 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 Amazon and Thrivent Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Thrivent Opportunity Income, you can compare the effects of market volatilities on Amazon 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 Amazon with a short position of Thrivent Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Thrivent Opportunity.
Diversification Opportunities for Amazon and Thrivent Opportunity
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amazon and Thrivent is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Thrivent Opportunity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Opportunity and Amazon 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 Amazon Inc 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 Amazon i.e., Amazon and Thrivent Opportunity go up and down completely randomly.
Pair Corralation between Amazon and Thrivent Opportunity
Given the investment horizon of 90 days Amazon Inc is expected to generate 8.72 times more return on investment than Thrivent Opportunity. However, Amazon is 8.72 times more volatile than Thrivent Opportunity Income. It trades about 0.05 of its potential returns per unit of risk. Thrivent Opportunity Income is currently generating about 0.17 per unit of risk. If you would invest 18,870 in Amazon Inc on September 3, 2024 and sell it today you would earn a total of 1,919 from holding Amazon Inc or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amazon Inc vs. Thrivent Opportunity Income
Performance |
| Timeline |
| Amazon Inc |
| Thrivent Opportunity |
Amazon and Thrivent Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Thrivent Opportunity
The main advantage of trading using opposite Amazon and Thrivent Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon 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 Amazon Inc 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.| Thrivent Opportunity vs. Pimco Income Fund | Thrivent Opportunity vs. Pimco Income Fund | Thrivent Opportunity vs. Pimco Income Fund | Thrivent Opportunity vs. Pimco Income Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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