Correlation Between Thrivent Natural and Oil Gas
Can any of the company-specific risk be diversified away by investing in both Thrivent Natural and Oil Gas 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 Thrivent Natural and Oil Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent Natural Resources and Oil Gas Ultrasector, you can compare the effects of market volatilities on Thrivent Natural and Oil Gas 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 Thrivent Natural with a short position of Oil Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Natural and Oil Gas.
Diversification Opportunities for Thrivent Natural and Oil Gas
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thrivent and Oil is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Oil Gas Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Gas Ultrasector and Thrivent Natural 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 Thrivent Natural Resources are associated (or correlated) with Oil Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Gas Ultrasector has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Oil Gas go up and down completely randomly.
Pair Corralation between Thrivent Natural and Oil Gas
Assuming the 90 days horizon Thrivent Natural is expected to generate 2.1 times less return on investment than Oil Gas. But when comparing it to its historical volatility, Thrivent Natural Resources is 19.79 times less risky than Oil Gas. It trades about 0.25 of its potential returns per unit of risk. Oil Gas Ultrasector is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,418 in Oil Gas Ultrasector on September 12, 2024 and sell it today you would earn a total of 261.00 from holding Oil Gas Ultrasector or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Natural Resources vs. Oil Gas Ultrasector
Performance |
| Timeline |
| Thrivent Natural Res |
| Oil Gas Ultrasector |
Thrivent Natural and Oil Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Natural and Oil Gas
The main advantage of trading using opposite Thrivent Natural and Oil Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Natural position performs unexpectedly, Oil Gas 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 Oil Gas will offset losses from the drop in Oil Gas' long position.| Thrivent Natural vs. Vanguard Total Stock | Thrivent Natural vs. Vanguard 500 Index | Thrivent Natural vs. Vanguard Total Stock | Thrivent Natural vs. Vanguard Total Stock |
| Oil Gas vs. Oil Gas Ultrasector | Oil Gas vs. Ultramid Cap Profund Ultramid Cap | Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector |
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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