Correlation Between Thrivent High and FlexShares Developed
Can any of the company-specific risk be diversified away by investing in both Thrivent High and FlexShares Developed 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 FlexShares Developed 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 FlexShares Developed Markets, you can compare the effects of market volatilities on Thrivent High and FlexShares Developed 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 FlexShares Developed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and FlexShares Developed.
Diversification Opportunities for Thrivent High and FlexShares Developed
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thrivent and FlexShares is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and FlexShares Developed Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Developed 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 FlexShares Developed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Developed has no effect on the direction of Thrivent High i.e., Thrivent High and FlexShares Developed go up and down completely randomly.
Pair Corralation between Thrivent High and FlexShares Developed
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.23 times more return on investment than FlexShares Developed. However, Thrivent High Yield is 4.38 times less risky than FlexShares Developed. It trades about 0.22 of its potential returns per unit of risk. FlexShares Developed Markets is currently generating about -0.02 per unit of risk. If you would invest 423.00 in Thrivent High Yield on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Thrivent High Yield or generate 0.71% 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. FlexShares Developed Markets
Performance |
| Timeline |
| Thrivent High Yield |
| FlexShares Developed |
Thrivent High and FlexShares Developed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and FlexShares Developed
The main advantage of trading using opposite Thrivent High and FlexShares Developed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, FlexShares Developed 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 FlexShares Developed will offset losses from the drop in FlexShares Developed'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 |
| FlexShares Developed vs. iShares ESG Aggregate | FlexShares Developed vs. SPDR MSCI Emerging | FlexShares Developed vs. Aquagold International | FlexShares Developed vs. Thrivent High Yield |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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