Correlation Between Capital World and Thrivent High
Can any of the company-specific risk be diversified away by investing in both Capital World and Thrivent High 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 Capital World and Thrivent High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital World Bond and Thrivent High Yield, you can compare the effects of market volatilities on Capital World and Thrivent High 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 Capital World with a short position of Thrivent High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Thrivent High.
Diversification Opportunities for Capital World and Thrivent High
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Thrivent is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Bond and Thrivent High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent High Yield and Capital World 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 Capital World Bond are associated (or correlated) with Thrivent High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent High Yield has no effect on the direction of Capital World i.e., Capital World and Thrivent High go up and down completely randomly.
Pair Corralation between Capital World and Thrivent High
Assuming the 90 days horizon Capital World Bond is expected to under-perform the Thrivent High. In addition to that, Capital World is 2.64 times more volatile than Thrivent High Yield. It trades about -0.05 of its total potential returns per unit of risk. Thrivent High Yield is currently generating about 0.27 per unit of volatility. If you would invest 422.00 in Thrivent High Yield on August 29, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital World Bond vs. Thrivent High Yield
Performance |
| Timeline |
| Capital World Bond |
| Thrivent High Yield |
Capital World and Thrivent High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Thrivent High
The main advantage of trading using opposite Capital World and Thrivent High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital World position performs unexpectedly, Thrivent High 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 High will offset losses from the drop in Thrivent High's long position.| Capital World vs. Capital World Bond | Capital World vs. HUMANA INC | Capital World vs. Aquagold International | Capital World vs. Barloworld Ltd ADR |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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