Correlation Between Thrivent High and Oak Ridge
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Oak Ridge 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 Oak Ridge 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 Oak Ridge Financial, you can compare the effects of market volatilities on Thrivent High and Oak Ridge 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 Oak Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Oak Ridge.
Diversification Opportunities for Thrivent High and Oak Ridge
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and Oak is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Oak Ridge Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Ridge Financial 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 Oak Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Ridge Financial has no effect on the direction of Thrivent High i.e., Thrivent High and Oak Ridge go up and down completely randomly.
Pair Corralation between Thrivent High and Oak Ridge
Assuming the 90 days horizon Thrivent High is expected to generate 18.08 times less return on investment than Oak Ridge. But when comparing it to its historical volatility, Thrivent High Yield is 5.9 times less risky than Oak Ridge. It trades about 0.16 of its potential returns per unit of risk. Oak Ridge Financial is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 1,907 in Oak Ridge Financial on September 3, 2024 and sell it today you would earn a total of 168.00 from holding Oak Ridge Financial or generate 8.81% 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. Oak Ridge Financial
Performance |
| Timeline |
| Thrivent High Yield |
| Oak Ridge Financial |
Thrivent High and Oak Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Oak Ridge
The main advantage of trading using opposite Thrivent High and Oak Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Oak Ridge 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 Oak Ridge will offset losses from the drop in Oak Ridge'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 |
| Oak Ridge vs. Citizens Bancorp Investment | Oak Ridge vs. First Keystone Corp | Oak Ridge vs. Greenville Federal Financial | Oak Ridge vs. Main Street Financial |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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