Correlation Between Thrivent High and Steward Small-mid
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Steward Small-mid 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 Steward Small-mid 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 Steward Small Mid Cap, you can compare the effects of market volatilities on Thrivent High and Steward Small-mid 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 Steward Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Steward Small-mid.
Diversification Opportunities for Thrivent High and Steward Small-mid
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and Steward is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Steward Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Small Mid 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 Steward Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Small Mid has no effect on the direction of Thrivent High i.e., Thrivent High and Steward Small-mid go up and down completely randomly.
Pair Corralation between Thrivent High and Steward Small-mid
Assuming the 90 days horizon Thrivent High is expected to generate 2.39 times less return on investment than Steward Small-mid. But when comparing it to its historical volatility, Thrivent High Yield is 5.97 times less risky than Steward Small-mid. It trades about 0.23 of its potential returns per unit of risk. Steward Small Mid Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,262 in Steward Small Mid Cap on August 29, 2024 and sell it today you would earn a total of 168.00 from holding Steward Small Mid Cap or generate 13.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. Steward Small Mid Cap
Performance |
| Timeline |
| Thrivent High Yield |
| Steward Small Mid |
Thrivent High and Steward Small-mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Steward Small-mid
The main advantage of trading using opposite Thrivent High and Steward Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Steward Small-mid 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 Steward Small-mid will offset losses from the drop in Steward Small-mid'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 |
| Steward Small-mid vs. Steward Large Cap | Steward Small-mid vs. Steward Global E | Steward Small-mid vs. Steward Select Bond | Steward Small-mid vs. Steward Small Mid 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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