Correlation Between Thrivent High and American Coastal
Can any of the company-specific risk be diversified away by investing in both Thrivent High and American Coastal 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 Thrivent High and American Coastal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent High Yield and American Coastal Insurance, you can compare the effects of market volatilities on Thrivent High and American Coastal 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 Thrivent High with a short position of American Coastal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and American Coastal.
Diversification Opportunities for Thrivent High and American Coastal
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thrivent and American is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and American Coastal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Coastal Ins and Thrivent High 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 Thrivent High Yield are associated (or correlated) with American Coastal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Coastal Ins has no effect on the direction of Thrivent High i.e., Thrivent High and American Coastal go up and down completely randomly.
Pair Corralation between Thrivent High and American Coastal
Assuming the 90 days horizon Thrivent High is expected to generate 18.24 times less return on investment than American Coastal. But when comparing it to its historical volatility, Thrivent High Yield is 17.11 times less risky than American Coastal. It trades about 0.22 of its potential returns per unit of risk. American Coastal Insurance is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,215 in American Coastal Insurance on September 1, 2024 and sell it today you would earn a total of 158.00 from holding American Coastal Insurance or generate 13.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. American Coastal Insurance
Performance |
| Timeline |
| Thrivent High Yield |
| American Coastal Ins |
Thrivent High and American Coastal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and American Coastal
The main advantage of trading using opposite Thrivent High and American Coastal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, American Coastal 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 American Coastal will offset losses from the drop in American Coastal's long position.| Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Opportunity Income |
| American Coastal vs. Selective Insurance Group | American Coastal vs. Aquagold International | American Coastal vs. Thrivent High Yield | American Coastal vs. Morningstar Unconstrained Allocation |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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