Correlation Between Thrivent Income and Praxis International
Can any of the company-specific risk be diversified away by investing in both Thrivent Income and Praxis International 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 Income and Praxis International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent Income Fund and Praxis International Index, you can compare the effects of market volatilities on Thrivent Income and Praxis International 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 Income with a short position of Praxis International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Income and Praxis International.
Diversification Opportunities for Thrivent Income and Praxis International
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THRIVENT and Praxis is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Income Fund and Praxis International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis International and Thrivent Income 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 Income Fund are associated (or correlated) with Praxis International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis International has no effect on the direction of Thrivent Income i.e., Thrivent Income and Praxis International go up and down completely randomly.
Pair Corralation between Thrivent Income and Praxis International
Assuming the 90 days horizon Thrivent Income is expected to generate 1.98 times less return on investment than Praxis International. But when comparing it to its historical volatility, Thrivent Income Fund is 2.2 times less risky than Praxis International. It trades about 0.08 of its potential returns per unit of risk. Praxis International Index is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,175 in Praxis International Index on September 2, 2024 and sell it today you would earn a total of 170.00 from holding Praxis International Index or generate 14.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Income Fund vs. Praxis International Index
Performance |
| Timeline |
| Thrivent Income |
| Praxis International |
Thrivent Income and Praxis International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Income and Praxis International
The main advantage of trading using opposite Thrivent Income and Praxis International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Income position performs unexpectedly, Praxis International 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 Praxis International will offset losses from the drop in Praxis International's long position.| Thrivent Income vs. Thrivent Partner Worldwide | Thrivent Income vs. Thrivent Partner Worldwide | Thrivent Income vs. Thrivent Large Cap | Thrivent Income vs. Thrivent Limited Maturity |
| Praxis International vs. Praxis Growth Index | Praxis International vs. Praxis Small Cap | Praxis International vs. Praxis Small Cap | Praxis International vs. Praxis Genesis Balanced |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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