Correlation Between Thrivent High and Eastern
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on Thrivent High and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Eastern.
Diversification Opportunities for Thrivent High and Eastern
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thrivent and Eastern is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Thrivent High i.e., Thrivent High and Eastern go up and down completely randomly.
Pair Corralation between Thrivent High and Eastern
Assuming the 90 days horizon Thrivent High is expected to generate 3.75 times less return on investment than Eastern. But when comparing it to its historical volatility, Thrivent High Yield is 9.74 times less risky than Eastern. It trades about 0.12 of its potential returns per unit of risk. Eastern Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,955 in Eastern Co on September 12, 2024 and sell it today you would earn a total of 1,082 from holding Eastern Co or generate 55.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Thrivent High Yield vs. Eastern Co
Performance |
| Timeline |
| Thrivent High Yield |
| Eastern |
Thrivent High and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Eastern
The main advantage of trading using opposite Thrivent High and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern'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 |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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