Correlation Between NYSE Composite and Thrivent Municipal
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Thrivent Municipal 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 NYSE Composite and Thrivent Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Thrivent Municipal Bond, you can compare the effects of market volatilities on NYSE Composite and Thrivent Municipal 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 NYSE Composite with a short position of Thrivent Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Thrivent Municipal.
Diversification Opportunities for NYSE Composite and Thrivent Municipal
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Thrivent is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Thrivent Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Municipal Bond and NYSE Composite 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 NYSE Composite are associated (or correlated) with Thrivent Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Municipal Bond has no effect on the direction of NYSE Composite i.e., NYSE Composite and Thrivent Municipal go up and down completely randomly.
Pair Corralation between NYSE Composite and Thrivent Municipal
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.76 times more return on investment than Thrivent Municipal. However, NYSE Composite is 1.76 times more volatile than Thrivent Municipal Bond. It trades about 0.29 of its potential returns per unit of risk. Thrivent Municipal Bond is currently generating about 0.2 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 79,355 from holding NYSE Composite or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Thrivent Municipal Bond
Performance |
| Timeline |
NYSE Composite and Thrivent Municipal Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Thrivent Municipal Bond
Pair trading matchups for Thrivent Municipal
Pair Trading with NYSE Composite and Thrivent Municipal
The main advantage of trading using opposite NYSE Composite and Thrivent Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Thrivent Municipal 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 Thrivent Municipal will offset losses from the drop in Thrivent Municipal's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Thrivent Municipal vs. Us Government Plus | Thrivent Municipal vs. Aig Government Money | Thrivent Municipal vs. Dreyfus Government Cash | Thrivent Municipal vs. Goldman Sachs Government |
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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