Correlation Between Thrivent High and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Absolute, you can compare the effects of market volatilities on Thrivent High and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Goldman Sachs.
Diversification Opportunities for Thrivent High and Goldman Sachs
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thrivent and Goldman is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Goldman Sachs Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Absolute 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Absolute has no effect on the direction of Thrivent High i.e., Thrivent High and Goldman Sachs go up and down completely randomly.
Pair Corralation between Thrivent High and Goldman Sachs
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.88 times more return on investment than Goldman Sachs. However, Thrivent High Yield is 1.13 times less risky than Goldman Sachs. It trades about 0.11 of its potential returns per unit of risk. Goldman Sachs Absolute is currently generating about 0.1 per unit of risk. If you would invest 359.00 in Thrivent High Yield on September 13, 2024 and sell it today you would earn a total of 67.00 from holding Thrivent High Yield or generate 18.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Thrivent High Yield vs. Goldman Sachs Absolute
Performance |
| Timeline |
| Thrivent High Yield |
| Goldman Sachs Absolute |
Thrivent High and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Goldman Sachs
The main advantage of trading using opposite Thrivent High and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' 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 |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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