Correlation Between Thrivent High and Vanguard Short-term
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Vanguard Short-term 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 Short-term 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 Short Term Investment Grade, you can compare the effects of market volatilities on Thrivent High and Vanguard Short-term 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 Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Vanguard Short-term.
Diversification Opportunities for Thrivent High and Vanguard Short-term
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrivent and Vanguard is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Vanguard Short Term Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Short Term 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 Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Short Term has no effect on the direction of Thrivent High i.e., Thrivent High and Vanguard Short-term go up and down completely randomly.
Pair Corralation between Thrivent High and Vanguard Short-term
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.95 times more return on investment than Vanguard Short-term. However, Thrivent High Yield is 1.05 times less risky than Vanguard Short-term. It trades about 0.32 of its potential returns per unit of risk. Vanguard Short Term Investment Grade is currently generating about -0.12 per unit of risk. If you would invest 422.00 in Thrivent High Yield on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Thrivent High Yield or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. Vanguard Short Term Investment
Performance |
| Timeline |
| Thrivent High Yield |
| Vanguard Short Term |
Thrivent High and Vanguard Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and Vanguard Short-term
The main advantage of trading using opposite Thrivent High and Vanguard Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Vanguard Short-term 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 Short-term will offset losses from the drop in Vanguard Short-term'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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