Correlation Between Thrivent High and VanEck Video
Can any of the company-specific risk be diversified away by investing in both Thrivent High and VanEck Video 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 VanEck Video 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 VanEck Video Gaming, you can compare the effects of market volatilities on Thrivent High and VanEck Video 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 VanEck Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and VanEck Video.
Diversification Opportunities for Thrivent High and VanEck Video
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thrivent and VanEck is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and VanEck Video Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Video Gaming 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 VanEck Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Video Gaming has no effect on the direction of Thrivent High i.e., Thrivent High and VanEck Video go up and down completely randomly.
Pair Corralation between Thrivent High and VanEck Video
Assuming the 90 days horizon Thrivent High is expected to generate 5.52 times less return on investment than VanEck Video. But when comparing it to its historical volatility, Thrivent High Yield is 6.12 times less risky than VanEck Video. It trades about 0.14 of its potential returns per unit of risk. VanEck Video Gaming is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,684 in VanEck Video Gaming on September 14, 2024 and sell it today you would earn a total of 2,884 from holding VanEck Video Gaming or generate 50.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. VanEck Video Gaming
Performance |
| Timeline |
| Thrivent High Yield |
| VanEck Video Gaming |
Thrivent High and VanEck Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and VanEck Video
The main advantage of trading using opposite Thrivent High and VanEck Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, VanEck Video 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 VanEck Video will offset losses from the drop in VanEck Video'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 |
| VanEck Video vs. Global X Thematic | VanEck Video vs. Aquagold International | VanEck Video vs. Morningstar Unconstrained Allocation | VanEck Video vs. Thrivent High Yield |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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