Correlation Between Thrivent High and Flowserve
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Flowserve 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 Flowserve 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 Flowserve, you can compare the effects of market volatilities on Thrivent High and Flowserve 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 Flowserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Flowserve.
Diversification Opportunities for Thrivent High and Flowserve
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and Flowserve is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Flowserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowserve 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 Flowserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowserve has no effect on the direction of Thrivent High i.e., Thrivent High and Flowserve go up and down completely randomly.
Pair Corralation between Thrivent High and Flowserve
Assuming the 90 days horizon Thrivent High is expected to generate 20.64 times less return on investment than Flowserve. But when comparing it to its historical volatility, Thrivent High Yield is 15.63 times less risky than Flowserve. It trades about 0.25 of its potential returns per unit of risk. Flowserve is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 5,294 in Flowserve on August 27, 2024 and sell it today you would earn a total of 806.00 from holding Flowserve or generate 15.22% 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. Flowserve
Performance |
| Timeline |
| Thrivent High Yield |
| Flowserve |
Thrivent High and Flowserve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Flowserve
The main advantage of trading using opposite Thrivent High and Flowserve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Flowserve 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 Flowserve will offset losses from the drop in Flowserve'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 |
| Flowserve vs. Aquagold International | Flowserve vs. Morningstar Unconstrained Allocation | Flowserve vs. High Yield Municipal Fund | Flowserve 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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