Correlation Between Thrivent High and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Emerging Markets 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 Emerging Markets 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 Emerging Markets Small, you can compare the effects of market volatilities on Thrivent High and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Emerging Markets.
Diversification Opportunities for Thrivent High and Emerging Markets
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrivent and Emerging is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Emerging Markets Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Small 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Small has no effect on the direction of Thrivent High i.e., Thrivent High and Emerging Markets go up and down completely randomly.
Pair Corralation between Thrivent High and Emerging Markets
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.38 times more return on investment than Emerging Markets. However, Thrivent High Yield is 2.65 times less risky than Emerging Markets. It trades about 0.14 of its potential returns per unit of risk. Emerging Markets Small is currently generating about 0.05 per unit of risk. If you would invest 378.00 in Thrivent High Yield on August 27, 2024 and sell it today you would earn a total of 47.00 from holding Thrivent High Yield or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. Emerging Markets Small
Performance |
| Timeline |
| Thrivent High Yield |
| Emerging Markets Small |
Thrivent High and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Emerging Markets
The main advantage of trading using opposite Thrivent High and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' 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 |
| Emerging Markets vs. Great West Real Estate | Emerging Markets vs. Deutsche Real Estate | Emerging Markets vs. Amg Managers Centersquare | Emerging Markets vs. Guggenheim Risk Managed |
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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