Correlation Between Thrivent High and Baird Short
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Baird Short 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 Baird Short 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 Baird Short Term Municipal, you can compare the effects of market volatilities on Thrivent High and Baird Short 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 Baird Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Baird Short.
Diversification Opportunities for Thrivent High and Baird Short
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and Baird is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Baird Short Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Short Term 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 Baird Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Short Term has no effect on the direction of Thrivent High i.e., Thrivent High and Baird Short go up and down completely randomly.
Pair Corralation between Thrivent High and Baird Short
Assuming the 90 days horizon Thrivent High Yield is expected to generate 2.7 times more return on investment than Baird Short. However, Thrivent High is 2.7 times more volatile than Baird Short Term Municipal. It trades about 0.18 of its potential returns per unit of risk. Baird Short Term Municipal is currently generating about 0.23 per unit of risk. If you would invest 380.00 in Thrivent High Yield on September 15, 2024 and sell it today you would earn a total of 45.00 from holding Thrivent High Yield or generate 11.84% 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. Baird Short Term Municipal
Performance |
| Timeline |
| Thrivent High Yield |
| Baird Short Term |
Thrivent High and Baird Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Baird Short
The main advantage of trading using opposite Thrivent High and Baird Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Baird Short 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 Baird Short will offset losses from the drop in Baird Short'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 |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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