Correlation Between Thrivent High and AdvisorShares Hotel
Can any of the company-specific risk be diversified away by investing in both Thrivent High and AdvisorShares Hotel 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 AdvisorShares Hotel 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 AdvisorShares Hotel ETF, you can compare the effects of market volatilities on Thrivent High and AdvisorShares Hotel 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 AdvisorShares Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and AdvisorShares Hotel.
Diversification Opportunities for Thrivent High and AdvisorShares Hotel
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and AdvisorShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and AdvisorShares Hotel ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Hotel ETF 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 AdvisorShares Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Hotel ETF has no effect on the direction of Thrivent High i.e., Thrivent High and AdvisorShares Hotel go up and down completely randomly.
Pair Corralation between Thrivent High and AdvisorShares Hotel
Assuming the 90 days horizon Thrivent High is expected to generate 2.56 times less return on investment than AdvisorShares Hotel. But when comparing it to its historical volatility, Thrivent High Yield is 3.75 times less risky than AdvisorShares Hotel. It trades about 0.12 of its potential returns per unit of risk. AdvisorShares Hotel ETF is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,238 in AdvisorShares Hotel ETF on September 12, 2024 and sell it today you would earn a total of 1,162 from holding AdvisorShares Hotel ETF or generate 51.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. AdvisorShares Hotel ETF
Performance |
| Timeline |
| Thrivent High Yield |
| AdvisorShares Hotel ETF |
Thrivent High and AdvisorShares Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and AdvisorShares Hotel
The main advantage of trading using opposite Thrivent High and AdvisorShares Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, AdvisorShares Hotel 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 AdvisorShares Hotel will offset losses from the drop in AdvisorShares Hotel'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 |
| AdvisorShares Hotel vs. Invesco Dynamic Building | AdvisorShares Hotel vs. SCOR PK | AdvisorShares Hotel vs. Morningstar Unconstrained Allocation | AdvisorShares Hotel 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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