Correlation Between Thrivent High and National Rural
Can any of the company-specific risk be diversified away by investing in both Thrivent High and National Rural 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 National Rural 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 National Rural Utilities, you can compare the effects of market volatilities on Thrivent High and National Rural 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 National Rural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and National Rural.
Diversification Opportunities for Thrivent High and National Rural
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thrivent and National is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and National Rural Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Rural Utilities 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 National Rural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Rural Utilities has no effect on the direction of Thrivent High i.e., Thrivent High and National Rural go up and down completely randomly.
Pair Corralation between Thrivent High and National Rural
Assuming the 90 days horizon Thrivent High is expected to generate 2.23 times less return on investment than National Rural. But when comparing it to its historical volatility, Thrivent High Yield is 5.72 times less risky than National Rural. It trades about 0.22 of its potential returns per unit of risk. National Rural Utilities is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,438 in National Rural Utilities on September 2, 2024 and sell it today you would earn a total of 37.00 from holding National Rural Utilities or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. National Rural Utilities
Performance |
| Timeline |
| Thrivent High Yield |
| National Rural Utilities |
Thrivent High and National Rural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and National Rural
The main advantage of trading using opposite Thrivent High and National Rural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, National Rural 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 National Rural will offset losses from the drop in National Rural'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 |
| National Rural vs. CMS Energy Corp | National Rural vs. Southern Co | National Rural vs. Duke Energy Corp | National Rural vs. Southern Co |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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