Correlation Between Thrivent High and The National
Can any of the company-specific risk be diversified away by investing in both Thrivent High and The National 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 The National 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 The National Tax Free, you can compare the effects of market volatilities on Thrivent High and The National 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 The National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and The National.
Diversification Opportunities for Thrivent High and The National
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thrivent and The is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and The National Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Tax 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 The National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Tax has no effect on the direction of Thrivent High i.e., Thrivent High and The National go up and down completely randomly.
Pair Corralation between Thrivent High and The National
Assuming the 90 days horizon Thrivent High is expected to generate 1.59 times less return on investment than The National. But when comparing it to its historical volatility, Thrivent High Yield is 1.68 times less risky than The National. It trades about 0.22 of its potential returns per unit of risk. The National Tax Free is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,857 in The National Tax Free on September 1, 2024 and sell it today you would earn a total of 21.00 from holding The National Tax Free or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. The National Tax Free
Performance |
| Timeline |
| Thrivent High Yield |
| National Tax |
Thrivent High and The National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and The National
The main advantage of trading using opposite Thrivent High and The National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, The National 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 The National will offset losses from the drop in The National'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 |
| The National vs. The Missouri Tax Free | The National vs. The Bond Fund | The National vs. High Yield Municipal Fund | The National vs. Fidelity Intermediate Municipal |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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