Correlation Between Federated Government and Thrivent Large
Can any of the company-specific risk be diversified away by investing in both Federated Government and Thrivent Large 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 Federated Government and Thrivent Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Government Ultrashort and Thrivent Large Cap, you can compare the effects of market volatilities on Federated Government and Thrivent Large 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 Federated Government with a short position of Thrivent Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Government and Thrivent Large.
Diversification Opportunities for Federated Government and Thrivent Large
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Thrivent is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Federated Government Ultrashor and Thrivent Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Large Cap and Federated Government 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 Federated Government Ultrashort are associated (or correlated) with Thrivent Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Large Cap has no effect on the direction of Federated Government i.e., Federated Government and Thrivent Large go up and down completely randomly.
Pair Corralation between Federated Government and Thrivent Large
Assuming the 90 days horizon Federated Government is expected to generate 6.07 times less return on investment than Thrivent Large. But when comparing it to its historical volatility, Federated Government Ultrashort is 10.7 times less risky than Thrivent Large. It trades about 0.19 of its potential returns per unit of risk. Thrivent Large Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,696 in Thrivent Large Cap on September 1, 2024 and sell it today you would earn a total of 253.00 from holding Thrivent Large Cap or generate 14.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Federated Government Ultrashor vs. Thrivent Large Cap
Performance |
| Timeline |
| Federated Government |
| Thrivent Large Cap |
Federated Government and Thrivent Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Government and Thrivent Large
The main advantage of trading using opposite Federated Government and Thrivent Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Government position performs unexpectedly, Thrivent Large 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 Large will offset losses from the drop in Thrivent Large's long position.| Federated Government vs. Federated Emerging Market | Federated Government vs. Federated Mdt All | Federated Government vs. Federated Mdt Balanced | Federated Government vs. Federated Global Allocation |
| Thrivent Large vs. Thrivent Partner Worldwide | Thrivent Large vs. Thrivent Partner Worldwide | Thrivent Large vs. Thrivent Large Cap | Thrivent Large vs. Thrivent Limited Maturity |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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