Correlation Between Energy Basic and Thrivent Government
Can any of the company-specific risk be diversified away by investing in both Energy Basic and Thrivent Government 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 Energy Basic and Thrivent Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Basic Materials and Thrivent Government Bond, you can compare the effects of market volatilities on Energy Basic and Thrivent Government 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 Energy Basic with a short position of Thrivent Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Basic and Thrivent Government.
Diversification Opportunities for Energy Basic and Thrivent Government
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Energy and Thrivent is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Energy Basic Materials and Thrivent Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Government Bond and Energy Basic 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 Energy Basic Materials are associated (or correlated) with Thrivent Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Government Bond has no effect on the direction of Energy Basic i.e., Energy Basic and Thrivent Government go up and down completely randomly.
Pair Corralation between Energy Basic and Thrivent Government
Assuming the 90 days horizon Energy Basic Materials is expected to under-perform the Thrivent Government. In addition to that, Energy Basic is 3.67 times more volatile than Thrivent Government Bond. It trades about -0.22 of its total potential returns per unit of risk. Thrivent Government Bond is currently generating about 0.11 per unit of volatility. If you would invest 872.00 in Thrivent Government Bond on September 14, 2024 and sell it today you would earn a total of 5.00 from holding Thrivent Government Bond or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Basic Materials vs. Thrivent Government Bond
Performance |
| Timeline |
| Energy Basic Materials |
| Thrivent Government Bond |
Energy Basic and Thrivent Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Basic and Thrivent Government
The main advantage of trading using opposite Energy Basic and Thrivent Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Basic position performs unexpectedly, Thrivent Government 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 Government will offset losses from the drop in Thrivent Government's long position.| Energy Basic vs. Salient Alternative Beta | Energy Basic vs. Aggressive Balanced Allocation | Energy Basic vs. Salient Alternative Beta | Energy Basic vs. Moderately Aggressive Balanced |
| Thrivent Government vs. Thrivent Partner Worldwide | Thrivent Government vs. Thrivent Partner Worldwide | Thrivent Government vs. Thrivent Large Cap | Thrivent Government vs. Thrivent Limited Maturity |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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