Correlation Between Thrivent High and MSA Safety
Can any of the company-specific risk be diversified away by investing in both Thrivent High and MSA Safety 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 MSA Safety 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 MSA Safety, you can compare the effects of market volatilities on Thrivent High and MSA Safety 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 MSA Safety. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and MSA Safety.
Diversification Opportunities for Thrivent High and MSA Safety
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thrivent and MSA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and MSA Safety in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSA Safety 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 MSA Safety. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSA Safety has no effect on the direction of Thrivent High i.e., Thrivent High and MSA Safety go up and down completely randomly.
Pair Corralation between Thrivent High and MSA Safety
Assuming the 90 days horizon Thrivent High is expected to generate 1.51 times less return on investment than MSA Safety. But when comparing it to its historical volatility, Thrivent High Yield is 4.89 times less risky than MSA Safety. It trades about 0.14 of its potential returns per unit of risk. MSA Safety is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14,553 in MSA Safety on August 31, 2024 and sell it today you would earn a total of 2,828 from holding MSA Safety or generate 19.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Thrivent High Yield vs. MSA Safety
Performance |
| Timeline |
| Thrivent High Yield |
| MSA Safety |
Thrivent High and MSA Safety Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and MSA Safety
The main advantage of trading using opposite Thrivent High and MSA Safety positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, MSA Safety 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 MSA Safety will offset losses from the drop in MSA Safety's long position.| Thrivent High vs. Thrivent Income Fund | Thrivent High vs. HUMANA INC | Thrivent High vs. SCOR PK | Thrivent High vs. Aquagold International |
| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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