Correlation Between Thrivent High and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Thrivent High and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on Thrivent High and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and International Consolidated.
Diversification Opportunities for Thrivent High and International Consolidated
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and International is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Thrivent High i.e., Thrivent High and International Consolidated go up and down completely randomly.
Pair Corralation between Thrivent High and International Consolidated
Assuming the 90 days horizon Thrivent High is expected to generate 83.93 times less return on investment than International Consolidated. But when comparing it to its historical volatility, Thrivent High Yield is 10.96 times less risky than International Consolidated. It trades about 0.08 of its potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.62 of returns per unit of risk over similar time horizon. If you would invest 619.00 in International Consolidated Airlines on September 19, 2024 and sell it today you would earn a total of 134.00 from holding International Consolidated Airlines or generate 21.65% 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. International Consolidated Air
Performance |
| Timeline |
| Thrivent High Yield |
| International Consolidated |
Thrivent High and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and International Consolidated
The main advantage of trading using opposite Thrivent High and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated'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 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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