Correlation Between Thrivent High and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Vanguard Emerging 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 Vanguard Emerging 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 Vanguard Emerging Markets, you can compare the effects of market volatilities on Thrivent High and Vanguard Emerging 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 Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Vanguard Emerging.
Diversification Opportunities for Thrivent High and Vanguard Emerging
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and Vanguard is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets 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 Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Thrivent High i.e., Thrivent High and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Thrivent High and Vanguard Emerging
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.16 times more return on investment than Vanguard Emerging. However, Thrivent High Yield is 6.19 times less risky than Vanguard Emerging. It trades about 0.24 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about -0.16 per unit of risk. If you would invest 422.00 in Thrivent High Yield on August 24, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. Vanguard Emerging Markets
Performance |
| Timeline |
| Thrivent High Yield |
| Vanguard Emerging Markets |
Thrivent High and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Vanguard Emerging
The main advantage of trading using opposite Thrivent High and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Vanguard Emerging 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 Vanguard Emerging will offset losses from the drop in Vanguard Emerging's long position.| Thrivent High vs. Thrivent Large Cap | Thrivent High vs. HUMANA INC | Thrivent High vs. Aquagold International | Thrivent High vs. Barloworld Ltd ADR |
| Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. HUMANA INC | Vanguard Emerging vs. Aquagold International | Vanguard Emerging vs. Barloworld Ltd ADR |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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