Correlation Between Thrivent High and Sit Minnesota
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Sit Minnesota 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 Sit Minnesota 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 Sit Minnesota Tax Free, you can compare the effects of market volatilities on Thrivent High and Sit Minnesota 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 Sit Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Sit Minnesota.
Diversification Opportunities for Thrivent High and Sit Minnesota
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thrivent and Sit is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Sit Minnesota Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Minnesota Tax 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 Sit Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Minnesota Tax has no effect on the direction of Thrivent High i.e., Thrivent High and Sit Minnesota go up and down completely randomly.
Pair Corralation between Thrivent High and Sit Minnesota
Assuming the 90 days horizon Thrivent High Yield is expected to generate 1.23 times more return on investment than Sit Minnesota. However, Thrivent High is 1.23 times more volatile than Sit Minnesota Tax Free. It trades about 0.09 of its potential returns per unit of risk. Sit Minnesota Tax Free is currently generating about 0.05 per unit of risk. If you would invest 369.00 in Thrivent High Yield on October 9, 2024 and sell it today you would earn a total of 54.00 from holding Thrivent High Yield or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. Sit Minnesota Tax Free
Performance |
| Timeline |
| Thrivent High Yield |
| Sit Minnesota Tax |
Thrivent High and Sit Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Sit Minnesota
The main advantage of trading using opposite Thrivent High and Sit Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Sit Minnesota 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 Sit Minnesota will offset losses from the drop in Sit Minnesota'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 |
| Sit Minnesota vs. Sit Small Cap | Sit Minnesota vs. Sit Global Dividend | Sit Minnesota vs. Sit Global Dividend | Sit Minnesota vs. Sit Small Cap |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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