Correlation Between Thrivent High and Third Avenue
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Third Avenue 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 Third Avenue 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 Third Avenue Small Cap, you can compare the effects of market volatilities on Thrivent High and Third Avenue 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 Third Avenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Third Avenue.
Diversification Opportunities for Thrivent High and Third Avenue
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and Third is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Third Avenue Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Avenue Small 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 Third Avenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Avenue Small has no effect on the direction of Thrivent High i.e., Thrivent High and Third Avenue go up and down completely randomly.
Pair Corralation between Thrivent High and Third Avenue
Assuming the 90 days horizon Thrivent High is expected to generate 1.14 times less return on investment than Third Avenue. But when comparing it to its historical volatility, Thrivent High Yield is 3.74 times less risky than Third Avenue. It trades about 0.12 of its potential returns per unit of risk. Third Avenue Small Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,806 in Third Avenue Small Cap on September 12, 2024 and sell it today you would earn a total of 331.00 from holding Third Avenue Small Cap or generate 18.33% 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. Third Avenue Small Cap
Performance |
| Timeline |
| Thrivent High Yield |
| Third Avenue Small |
Thrivent High and Third Avenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Third Avenue
The main advantage of trading using opposite Thrivent High and Third Avenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Third Avenue 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 Third Avenue will offset losses from the drop in Third Avenue'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 |
| Third Avenue vs. Vanguard Small Cap Value | Third Avenue vs. SCOR PK | Third Avenue vs. Morningstar Unconstrained Allocation | Third Avenue 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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