Correlation Between Thrivent High and Lument Finance
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Lument Finance 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 Lument Finance 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 Lument Finance Trust, you can compare the effects of market volatilities on Thrivent High and Lument Finance 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 Lument Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Lument Finance.
Diversification Opportunities for Thrivent High and Lument Finance
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrivent and Lument is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Lument Finance Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lument Finance Trust 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 Lument Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lument Finance Trust has no effect on the direction of Thrivent High i.e., Thrivent High and Lument Finance go up and down completely randomly.
Pair Corralation between Thrivent High and Lument Finance
Assuming the 90 days horizon Thrivent High is expected to generate 3.45 times less return on investment than Lument Finance. But when comparing it to its historical volatility, Thrivent High Yield is 21.97 times less risky than Lument Finance. It trades about 0.25 of its potential returns per unit of risk. Lument Finance Trust is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 253.00 in Lument Finance Trust on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Lument Finance Trust or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. Lument Finance Trust
Performance |
| Timeline |
| Thrivent High Yield |
| Lument Finance Trust |
Thrivent High and Lument Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Lument Finance
The main advantage of trading using opposite Thrivent High and Lument Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Lument Finance 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 Lument Finance will offset losses from the drop in Lument Finance'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 |
| Lument Finance vs. AGNC Investment Corp | Lument Finance vs. Aquagold International | Lument Finance vs. Morningstar Unconstrained Allocation | Lument Finance vs. Thrivent High Yield |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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