Correlation Between Thrivent High and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Sterling Capital 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 Sterling Capital 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 Sterling Capital Special, you can compare the effects of market volatilities on Thrivent High and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Sterling Capital.
Diversification Opportunities for Thrivent High and Sterling Capital
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and Sterling is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Sterling Capital Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Special 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Special has no effect on the direction of Thrivent High i.e., Thrivent High and Sterling Capital go up and down completely randomly.
Pair Corralation between Thrivent High and Sterling Capital
Assuming the 90 days horizon Thrivent High is expected to generate 3.07 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Thrivent High Yield is 4.62 times less risky than Sterling Capital. It trades about 0.22 of its potential returns per unit of risk. Sterling Capital Special is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,800 in Sterling Capital Special on September 1, 2024 and sell it today you would earn a total of 485.00 from holding Sterling Capital Special or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Thrivent High Yield vs. Sterling Capital Special
Performance |
| Timeline |
| Thrivent High Yield |
| Sterling Capital Special |
Thrivent High and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Sterling Capital
The main advantage of trading using opposite Thrivent High and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Opportunity Income |
| Sterling Capital vs. Angel Oak Financial | Sterling Capital vs. Blackrock Financial Institutions | Sterling Capital vs. Mesirow Financial Small | Sterling Capital vs. Transamerica Financial Life |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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