Correlation Between Thrivent High and American Funds
Can any of the company-specific risk be diversified away by investing in both Thrivent High and American Funds 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 American Funds 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 American Funds 2020, you can compare the effects of market volatilities on Thrivent High and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and American Funds.
Diversification Opportunities for Thrivent High and American Funds
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrivent and American is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and American Funds 2020 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2020 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2020 has no effect on the direction of Thrivent High i.e., Thrivent High and American Funds go up and down completely randomly.
Pair Corralation between Thrivent High and American Funds
Assuming the 90 days horizon Thrivent High is expected to generate 1.15 times less return on investment than American Funds. But when comparing it to its historical volatility, Thrivent High Yield is 1.47 times less risky than American Funds. It trades about 0.15 of its potential returns per unit of risk. American Funds 2020 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,197 in American Funds 2020 on September 12, 2024 and sell it today you would earn a total of 201.00 from holding American Funds 2020 or generate 16.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Thrivent High Yield vs. American Funds 2020
Performance |
| Timeline |
| Thrivent High Yield |
| American Funds 2020 |
Thrivent High and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and American Funds
The main advantage of trading using opposite Thrivent High and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' 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 |
| American Funds vs. SCOR PK | American Funds vs. Morningstar Unconstrained Allocation | American Funds vs. Thrivent High Yield | American Funds vs. Via Renewables |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |