Correlation Between Thrivent High and Business First
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Business First 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 Business First 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 Business First Bancshares, you can compare the effects of market volatilities on Thrivent High and Business First 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 Business First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Business First.
Diversification Opportunities for Thrivent High and Business First
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrivent and Business is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Business First Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Business First Bancshares 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 Business First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Business First Bancshares has no effect on the direction of Thrivent High i.e., Thrivent High and Business First go up and down completely randomly.
Pair Corralation between Thrivent High and Business First
Assuming the 90 days horizon Thrivent High is expected to generate 2.58 times less return on investment than Business First. But when comparing it to its historical volatility, Thrivent High Yield is 7.87 times less risky than Business First. It trades about 0.12 of its potential returns per unit of risk. Business First Bancshares is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,074 in Business First Bancshares on September 12, 2024 and sell it today you would earn a total of 770.00 from holding Business First Bancshares or generate 37.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Thrivent High Yield vs. Business First Bancshares
Performance |
| Timeline |
| Thrivent High Yield |
| Business First Bancshares |
Thrivent High and Business First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Business First
The main advantage of trading using opposite Thrivent High and Business First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Business First 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 Business First will offset losses from the drop in Business First'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 |
| Business First vs. JPMorgan Chase Co | Business First vs. Citigroup | Business First vs. Wells Fargo | Business First vs. Toronto Dominion Bank |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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