Correlation Between Thrivent High and Prosperity Bancshares
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Prosperity Bancshares 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 Prosperity Bancshares 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 Prosperity Bancshares, you can compare the effects of market volatilities on Thrivent High and Prosperity Bancshares 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 Prosperity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Prosperity Bancshares.
Diversification Opportunities for Thrivent High and Prosperity Bancshares
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrivent and Prosperity is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Prosperity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosperity Bancshares 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 Prosperity Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosperity Bancshares has no effect on the direction of Thrivent High i.e., Thrivent High and Prosperity Bancshares go up and down completely randomly.
Pair Corralation between Thrivent High and Prosperity Bancshares
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.16 times more return on investment than Prosperity Bancshares. However, Thrivent High Yield is 6.07 times less risky than Prosperity Bancshares. It trades about 0.08 of its potential returns per unit of risk. Prosperity Bancshares is currently generating about -0.06 per unit of risk. If you would invest 426.00 in Thrivent High Yield on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Thrivent High Yield or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Thrivent High Yield vs. Prosperity Bancshares
Performance |
| Timeline |
| Thrivent High Yield |
| Prosperity Bancshares |
Thrivent High and Prosperity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Prosperity Bancshares
The main advantage of trading using opposite Thrivent High and Prosperity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Prosperity Bancshares 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 Prosperity Bancshares will offset losses from the drop in Prosperity Bancshares' 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 |
| Prosperity Bancshares vs. Heartland Financial USA | Prosperity Bancshares vs. Heritage Commerce Corp | Prosperity Bancshares vs. Business First Bancshares | Prosperity Bancshares vs. German American Bancorp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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