Correlation Between Aig Government and Thrivent Municipal
Can any of the company-specific risk be diversified away by investing in both Aig Government 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 Aig Government and Thrivent Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and Thrivent Municipal Bond, you can compare the effects of market volatilities on Aig Government 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 Aig Government with a short position of Thrivent Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Thrivent Municipal.
Diversification Opportunities for Aig Government and Thrivent Municipal
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aig and Thrivent is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money 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 Aig Government 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 Aig Government Money 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 Aig Government i.e., Aig Government and Thrivent Municipal go up and down completely randomly.
Pair Corralation between Aig Government and Thrivent Municipal
Assuming the 90 days horizon Aig Government is expected to generate 1.74 times less return on investment than Thrivent Municipal. But when comparing it to its historical volatility, Aig Government Money is 1.48 times less risky than Thrivent Municipal. It trades about 0.17 of its potential returns per unit of risk. Thrivent Municipal Bond is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,023 in Thrivent Municipal Bond on August 31, 2024 and sell it today you would earn a total of 16.00 from holding Thrivent Municipal Bond or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Thrivent Municipal Bond
Performance |
| Timeline |
| Aig Government Money |
| Thrivent Municipal Bond |
Aig Government and Thrivent Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Thrivent Municipal
The main advantage of trading using opposite Aig Government and Thrivent Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government 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.| Aig Government vs. Western Asset Inflation | Aig Government vs. Aqr Managed Futures | Aig Government vs. Nationwide Inflation Protected Securities | Aig Government vs. Cref Inflation Linked Bond |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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