Correlation Between Thrivent High and Short Duration
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Short Duration 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 Short Duration 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 Short Duration Inflation, you can compare the effects of market volatilities on Thrivent High and Short Duration 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 Short Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Short Duration.
Diversification Opportunities for Thrivent High and Short Duration
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thrivent and Short is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Short Duration Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Duration Inflation 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 Short Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Duration Inflation has no effect on the direction of Thrivent High i.e., Thrivent High and Short Duration go up and down completely randomly.
Pair Corralation between Thrivent High and Short Duration
Assuming the 90 days horizon Thrivent High Yield is expected to generate 1.36 times more return on investment than Short Duration. However, Thrivent High is 1.36 times more volatile than Short Duration Inflation. It trades about 0.23 of its potential returns per unit of risk. Short Duration Inflation is currently generating about 0.18 per unit of risk. If you would invest 405.00 in Thrivent High Yield on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Thrivent High Yield or generate 5.43% 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. Short Duration Inflation
Performance |
| Timeline |
| Thrivent High Yield |
| Short Duration Inflation |
Thrivent High and Short Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Short Duration
The main advantage of trading using opposite Thrivent High and Short Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Short Duration 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 Short Duration will offset losses from the drop in Short Duration'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 |
| Short Duration vs. Mid Cap Value | Short Duration vs. Equity Growth Fund | Short Duration vs. Income Growth Fund | Short Duration vs. Diversified Bond Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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