Correlation Between Thrivent High and Farmers National
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Farmers National 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 Farmers National 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 Farmers National Banc, you can compare the effects of market volatilities on Thrivent High and Farmers National 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 Farmers National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Farmers National.
Diversification Opportunities for Thrivent High and Farmers National
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrivent and Farmers is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Farmers National Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers National Banc 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 Farmers National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers National Banc has no effect on the direction of Thrivent High i.e., Thrivent High and Farmers National go up and down completely randomly.
Pair Corralation between Thrivent High and Farmers National
Assuming the 90 days horizon Thrivent High is expected to generate 1.76 times less return on investment than Farmers National. But when comparing it to its historical volatility, Thrivent High Yield is 6.68 times less risky than Farmers National. It trades about 0.12 of its potential returns per unit of risk. Farmers National Banc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,283 in Farmers National Banc on September 12, 2024 and sell it today you would earn a total of 297.00 from holding Farmers National Banc or generate 23.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Thrivent High Yield vs. Farmers National Banc
Performance |
| Timeline |
| Thrivent High Yield |
| Farmers National Banc |
Thrivent High and Farmers National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Farmers National
The main advantage of trading using opposite Thrivent High and Farmers National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Farmers National 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 Farmers National will offset losses from the drop in Farmers National'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 |
| Farmers National vs. JPMorgan Chase Co | Farmers National vs. Citigroup | Farmers National vs. Wells Fargo | Farmers National vs. Toronto Dominion Bank |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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