Correlation Between Capital Income and Thrivent High
Can any of the company-specific risk be diversified away by investing in both Capital Income and Thrivent High 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 Capital Income and Thrivent High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and Thrivent High Yield, you can compare the effects of market volatilities on Capital Income and Thrivent High 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 Capital Income with a short position of Thrivent High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and Thrivent High.
Diversification Opportunities for Capital Income and Thrivent High
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capital and Thrivent is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and Thrivent High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent High Yield and Capital Income 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 Capital Income Builder are associated (or correlated) with Thrivent High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent High Yield has no effect on the direction of Capital Income i.e., Capital Income and Thrivent High go up and down completely randomly.
Pair Corralation between Capital Income and Thrivent High
Assuming the 90 days horizon Capital Income Builder is expected to generate 1.65 times more return on investment than Thrivent High. However, Capital Income is 1.65 times more volatile than Thrivent High Yield. It trades about 0.08 of its potential returns per unit of risk. Thrivent High Yield is currently generating about 0.11 per unit of risk. If you would invest 6,009 in Capital Income Builder on August 29, 2024 and sell it today you would earn a total of 1,290 from holding Capital Income Builder or generate 21.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Income Builder vs. Thrivent High Yield
Performance |
| Timeline |
| Capital Income Builder |
| Thrivent High Yield |
Capital Income and Thrivent High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and Thrivent High
The main advantage of trading using opposite Capital Income and Thrivent High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income position performs unexpectedly, Thrivent High 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 High will offset losses from the drop in Thrivent High's long position.| Capital Income vs. Capital Growth Fund | Capital Income vs. Capital Group Equity | Capital Income vs. Capital World Growth | Capital Income vs. Capital World Growth |
| Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Income Fund | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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