Correlation Between World Energy and Thrivent Natural
Can any of the company-specific risk be diversified away by investing in both World Energy and Thrivent Natural 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 World Energy and Thrivent Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Thrivent Natural Resources, you can compare the effects of market volatilities on World Energy and Thrivent Natural 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 World Energy with a short position of Thrivent Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Thrivent Natural.
Diversification Opportunities for World Energy and Thrivent Natural
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between World and Thrivent is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Thrivent Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Natural Res and World Energy 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 World Energy Fund are associated (or correlated) with Thrivent Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Natural Res has no effect on the direction of World Energy i.e., World Energy and Thrivent Natural go up and down completely randomly.
Pair Corralation between World Energy and Thrivent Natural
Assuming the 90 days horizon World Energy Fund is expected to generate 12.42 times more return on investment than Thrivent Natural. However, World Energy is 12.42 times more volatile than Thrivent Natural Resources. It trades about 0.04 of its potential returns per unit of risk. Thrivent Natural Resources is currently generating about 0.22 per unit of risk. If you would invest 1,231 in World Energy Fund on September 13, 2024 and sell it today you would earn a total of 256.00 from holding World Energy Fund or generate 20.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
World Energy Fund vs. Thrivent Natural Resources
Performance |
| Timeline |
| World Energy |
| Thrivent Natural Res |
World Energy and Thrivent Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Thrivent Natural
The main advantage of trading using opposite World Energy and Thrivent Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy position performs unexpectedly, Thrivent Natural 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 Natural will offset losses from the drop in Thrivent Natural's long position.| World Energy vs. Hennessy Bp Energy | World Energy vs. Franklin Natural Resources | World Energy vs. Icon Natural Resources | World Energy vs. Gamco Natural Resources |
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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 the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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