Correlation Between Thrivent High and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Thrivent High and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Floating Rate.
Diversification Opportunities for Thrivent High and Floating Rate
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrivent and Floating is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Thrivent High i.e., Thrivent High and Floating Rate go up and down completely randomly.
Pair Corralation between Thrivent High and Floating Rate
Assuming the 90 days horizon Thrivent High is expected to generate 1.24 times less return on investment than Floating Rate. In addition to that, Thrivent High is 1.3 times more volatile than Floating Rate Fund. It trades about 0.11 of its total potential returns per unit of risk. Floating Rate Fund is currently generating about 0.18 per unit of volatility. If you would invest 813.00 in Floating Rate Fund on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Floating Rate Fund or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Thrivent High Yield vs. Floating Rate Fund
Performance |
| Timeline |
| Thrivent High Yield |
| Floating Rate |
Thrivent High and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Floating Rate
The main advantage of trading using opposite Thrivent High and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate'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 |
| Floating Rate vs. T Rowe Price | Floating Rate vs. Transamerica Emerging Markets | Floating Rate vs. Ab All Market | Floating Rate vs. Ashmore Emerging Markets |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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