Correlation Between International Bancshares and Thrivent High
Can any of the company-specific risk be diversified away by investing in both International Bancshares 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 International Bancshares and Thrivent High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Bancshares and Thrivent High Yield, you can compare the effects of market volatilities on International Bancshares 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 International Bancshares with a short position of Thrivent High. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Bancshares and Thrivent High.
Diversification Opportunities for International Bancshares and Thrivent High
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and Thrivent is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding International Bancshares 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 International Bancshares 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 International Bancshares 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 International Bancshares i.e., International Bancshares and Thrivent High go up and down completely randomly.
Pair Corralation between International Bancshares and Thrivent High
Given the investment horizon of 90 days International Bancshares is expected to generate 8.33 times more return on investment than Thrivent High. However, International Bancshares is 8.33 times more volatile than Thrivent High Yield. It trades about 0.09 of its potential returns per unit of risk. Thrivent High Yield is currently generating about 0.17 per unit of risk. If you would invest 4,819 in International Bancshares on September 4, 2024 and sell it today you would earn a total of 2,388 from holding International Bancshares or generate 49.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Bancshares vs. Thrivent High Yield
Performance |
| Timeline |
| International Bancshares |
| Thrivent High Yield |
International Bancshares and Thrivent High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Bancshares and Thrivent High
The main advantage of trading using opposite International Bancshares and Thrivent High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Bancshares 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.| International Bancshares vs. Home Federal Bancorp | International Bancshares vs. First Financial Northwest | International Bancshares vs. First Northwest Bancorp | International Bancshares vs. First Capital |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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