Correlation Between Thrivent High and Knife River
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Knife River 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 Knife River 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 Knife River, you can compare the effects of market volatilities on Thrivent High and Knife River 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 Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Knife River.
Diversification Opportunities for Thrivent High and Knife River
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and Knife is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River 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 Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of Thrivent High i.e., Thrivent High and Knife River go up and down completely randomly.
Pair Corralation between Thrivent High and Knife River
Assuming the 90 days horizon Thrivent High is expected to generate 8.94 times less return on investment than Knife River. But when comparing it to its historical volatility, Thrivent High Yield is 7.4 times less risky than Knife River. It trades about 0.11 of its potential returns per unit of risk. Knife River is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,551 in Knife River on September 2, 2024 and sell it today you would earn a total of 6,799 from holding Knife River or generate 191.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.81% |
| Values | Daily Returns |
Thrivent High Yield vs. Knife River
Performance |
| Timeline |
| Thrivent High Yield |
| Knife River |
Thrivent High and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Knife River
The main advantage of trading using opposite Thrivent High and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Knife River 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 Knife River will offset losses from the drop in Knife River's long position.| Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Opportunity Income |
| Knife River vs. Marchex | Knife River vs. WPP PLC ADR | Knife River vs. Sensient Technologies | Knife River vs. Stepan Company |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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