Correlation Between Thrivent High and Kentucky Tax-free
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Kentucky Tax-free 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 Kentucky Tax-free 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 Kentucky Tax Free Income, you can compare the effects of market volatilities on Thrivent High and Kentucky Tax-free 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 Kentucky Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Kentucky Tax-free.
Diversification Opportunities for Thrivent High and Kentucky Tax-free
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thrivent and Kentucky is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Kentucky Tax Free Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky Tax Free 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 Kentucky Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky Tax Free has no effect on the direction of Thrivent High i.e., Thrivent High and Kentucky Tax-free go up and down completely randomly.
Pair Corralation between Thrivent High and Kentucky Tax-free
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.51 times more return on investment than Kentucky Tax-free. However, Thrivent High Yield is 1.97 times less risky than Kentucky Tax-free. It trades about 0.21 of its potential returns per unit of risk. Kentucky Tax Free Income is currently generating about 0.11 per unit of risk. If you would invest 422.00 in Thrivent High Yield on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Thrivent High Yield or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. Kentucky Tax Free Income
Performance |
| Timeline |
| Thrivent High Yield |
| Kentucky Tax Free |
Thrivent High and Kentucky Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Kentucky Tax-free
The main advantage of trading using opposite Thrivent High and Kentucky Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Kentucky Tax-free 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 Kentucky Tax-free will offset losses from the drop in Kentucky Tax-free'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 |
| Kentucky Tax-free vs. Kentucky Tax Free Short To Medium | Kentucky Tax-free vs. North Carolina Tax Free | Kentucky Tax-free vs. Intermediate Government Bond | Kentucky Tax-free vs. Taxable Municipal Bond |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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