Correlation Between Thrivent High and Air France
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Air France 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 Air France 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 Air France KLM, you can compare the effects of market volatilities on Thrivent High and Air France 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 Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Air France.
Diversification Opportunities for Thrivent High and Air France
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thrivent and Air is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Air France KLM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM 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 Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Thrivent High i.e., Thrivent High and Air France go up and down completely randomly.
Pair Corralation between Thrivent High and Air France
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.07 times more return on investment than Air France. However, Thrivent High Yield is 13.83 times less risky than Air France. It trades about 0.08 of its potential returns per unit of risk. Air France KLM is currently generating about -0.08 per unit of risk. If you would invest 424.00 in Thrivent High Yield on September 18, 2024 and sell it today you would earn a total of 1.00 from holding Thrivent High Yield or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. Air France KLM
Performance |
| Timeline |
| Thrivent High Yield |
| Air France KLM |
Thrivent High and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Air France
The main advantage of trading using opposite Thrivent High and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Income Fund | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap |
| Air France vs. HUMANA INC | Air France vs. Barloworld Ltd ADR | Air France vs. Morningstar Unconstrained Allocation | Air France vs. Thrivent High Yield |
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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