Correlation Between Thrivent High and American Funds
Can any of the company-specific risk be diversified away by investing in both Thrivent High and American Funds 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 American Funds 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 American Funds Inflation, you can compare the effects of market volatilities on Thrivent High and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and American Funds.
Diversification Opportunities for Thrivent High and American Funds
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and American is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and American Funds Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Inflation 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Inflation has no effect on the direction of Thrivent High i.e., Thrivent High and American Funds go up and down completely randomly.
Pair Corralation between Thrivent High and American Funds
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.75 times more return on investment than American Funds. However, Thrivent High Yield is 1.33 times less risky than American Funds. It trades about 0.13 of its potential returns per unit of risk. American Funds Inflation is currently generating about 0.04 per unit of risk. If you would invest 357.00 in Thrivent High Yield on November 27, 2024 and sell it today you would earn a total of 68.00 from holding Thrivent High Yield or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. American Funds Inflation
Performance |
| Timeline |
| Thrivent High Yield |
| American Funds Inflation |
Thrivent High and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and American Funds
The main advantage of trading using opposite Thrivent High and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' 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 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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