Correlation Between Thrivent High and Park Ohio
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Park Ohio 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 Park Ohio 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 Park Ohio Holdings, you can compare the effects of market volatilities on Thrivent High and Park Ohio 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 Park Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Park Ohio.
Diversification Opportunities for Thrivent High and Park Ohio
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrivent and Park is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Park Ohio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Ohio Holdings 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 Park Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Ohio Holdings has no effect on the direction of Thrivent High i.e., Thrivent High and Park Ohio go up and down completely randomly.
Pair Corralation between Thrivent High and Park Ohio
Assuming the 90 days horizon Thrivent High is expected to generate 6.96 times less return on investment than Park Ohio. But when comparing it to its historical volatility, Thrivent High Yield is 9.55 times less risky than Park Ohio. It trades about 0.11 of its potential returns per unit of risk. Park Ohio Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,210 in Park Ohio Holdings on August 30, 2024 and sell it today you would earn a total of 1,994 from holding Park Ohio Holdings or generate 164.79% 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. Park Ohio Holdings
Performance |
| Timeline |
| Thrivent High Yield |
| Park Ohio Holdings |
Thrivent High and Park Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Park Ohio
The main advantage of trading using opposite Thrivent High and Park Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Park Ohio 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 Park Ohio will offset losses from the drop in Park Ohio'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 |
| Park Ohio vs. Hurco Companies | Park Ohio vs. Enerpac Tool Group | Park Ohio vs. China Yuchai International | Park Ohio vs. Luxfer Holdings PLC |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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