Correlation Between Dow Jones and Thrivent Mid
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Thrivent Mid 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 Dow Jones and Thrivent Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Thrivent Mid Cap, you can compare the effects of market volatilities on Dow Jones and Thrivent Mid 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 Dow Jones with a short position of Thrivent Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Thrivent Mid.
Diversification Opportunities for Dow Jones and Thrivent Mid
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and THRIVENT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Thrivent Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Mid Cap and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Thrivent Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Mid Cap has no effect on the direction of Dow Jones i.e., Dow Jones and Thrivent Mid go up and down completely randomly.
Pair Corralation between Dow Jones and Thrivent Mid
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.77 times more return on investment than Thrivent Mid. However, Dow Jones Industrial is 1.3 times less risky than Thrivent Mid. It trades about -0.25 of its potential returns per unit of risk. Thrivent Mid Cap is currently generating about -0.26 per unit of risk. If you would invest 4,485,035 in Dow Jones Industrial on November 29, 2024 and sell it today you would lose (141,723) from holding Dow Jones Industrial or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Thrivent Mid Cap
Performance |
| Timeline |
Dow Jones and Thrivent Mid Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Thrivent Mid Cap
Pair trading matchups for Thrivent Mid
Pair Trading with Dow Jones and Thrivent Mid
The main advantage of trading using opposite Dow Jones and Thrivent Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Thrivent Mid 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 Mid will offset losses from the drop in Thrivent Mid's long position.| Dow Jones vs. Starbucks | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Finnair Oyj | Dow Jones vs. Mesa Air Group |
| Thrivent Mid vs. Thrivent Large Cap | Thrivent Mid vs. Thrivent Small Cap | Thrivent Mid vs. Thrivent Large Cap | Thrivent Mid 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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