Correlation Between Thrivent High and BQE Water
Can any of the company-specific risk be diversified away by investing in both Thrivent High and BQE Water 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 BQE Water 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 BQE Water, you can compare the effects of market volatilities on Thrivent High and BQE Water 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 BQE Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and BQE Water.
Diversification Opportunities for Thrivent High and BQE Water
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thrivent and BQE is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and BQE Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BQE Water 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 BQE Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BQE Water has no effect on the direction of Thrivent High i.e., Thrivent High and BQE Water go up and down completely randomly.
Pair Corralation between Thrivent High and BQE Water
Assuming the 90 days horizon Thrivent High is expected to generate 9.06 times less return on investment than BQE Water. But when comparing it to its historical volatility, Thrivent High Yield is 19.67 times less risky than BQE Water. It trades about 0.14 of its potential returns per unit of risk. BQE Water is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,273 in BQE Water on September 14, 2024 and sell it today you would earn a total of 1,527 from holding BQE Water or generate 67.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Thrivent High Yield vs. BQE Water
Performance |
| Timeline |
| Thrivent High Yield |
| BQE Water |
Thrivent High and BQE Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and BQE Water
The main advantage of trading using opposite Thrivent High and BQE Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, BQE Water 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 BQE Water will offset losses from the drop in BQE Water'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 |
| BQE Water vs. JPX Global | BQE Water vs. Susglobal Energy Corp | BQE Water vs. Houston Natural Resources | BQE Water vs. Agilyx AS |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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