Correlation Between Payden High and Thrivent Diversified
Can any of the company-specific risk be diversified away by investing in both Payden High and Thrivent Diversified 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 Payden High and Thrivent Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden High Income and Thrivent Diversified Income, you can compare the effects of market volatilities on Payden High and Thrivent Diversified 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 Payden High with a short position of Thrivent Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden High and Thrivent Diversified.
Diversification Opportunities for Payden High and Thrivent Diversified
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Payden and Thrivent is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Payden High Income and Thrivent Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Diversified and Payden 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 Payden High Income are associated (or correlated) with Thrivent Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Diversified has no effect on the direction of Payden High i.e., Payden High and Thrivent Diversified go up and down completely randomly.
Pair Corralation between Payden High and Thrivent Diversified
Assuming the 90 days horizon Payden High Income is expected to generate 0.61 times more return on investment than Thrivent Diversified. However, Payden High Income is 1.64 times less risky than Thrivent Diversified. It trades about 0.16 of its potential returns per unit of risk. Thrivent Diversified Income is currently generating about 0.04 per unit of risk. If you would invest 627.00 in Payden High Income on November 6, 2024 and sell it today you would earn a total of 11.00 from holding Payden High Income or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Payden High Income vs. Thrivent Diversified Income
Performance |
| Timeline |
| Payden High Income |
| Thrivent Diversified |
Payden High and Thrivent Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden High and Thrivent Diversified
The main advantage of trading using opposite Payden High and Thrivent Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden High position performs unexpectedly, Thrivent Diversified 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 Diversified will offset losses from the drop in Thrivent Diversified's long position.| Payden High vs. Dreyfus High Yield | Payden High vs. Blackrock High Yield | Payden High vs. Jpmorgan High Yield | Payden High vs. Federated High Yield |
| Thrivent Diversified vs. Franklin Adjustable Government | Thrivent Diversified vs. Old Westbury California | Thrivent Diversified vs. Siit High Yield | Thrivent Diversified vs. Morningstar Defensive Bond |
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 CEOs Directory module to screen CEOs from public companies around the world.
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