Correlation Between Thrivent Natural and Payden High
Can any of the company-specific risk be diversified away by investing in both Thrivent Natural and Payden 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 Thrivent Natural and Payden High 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 Payden High Income, you can compare the effects of market volatilities on Thrivent Natural and Payden 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 Thrivent Natural with a short position of Payden High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Natural and Payden High.
Diversification Opportunities for Thrivent Natural and Payden High
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thrivent and Payden is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Payden High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden High Income 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 Payden High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden High Income has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Payden High go up and down completely randomly.
Pair Corralation between Thrivent Natural and Payden High
Assuming the 90 days horizon Thrivent Natural is expected to generate 1.58 times less return on investment than Payden High. But when comparing it to its historical volatility, Thrivent Natural Resources is 2.73 times less risky than Payden High. It trades about 0.15 of its potential returns per unit of risk. Payden High Income is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 640.00 in Payden High Income on September 14, 2024 and sell it today you would earn a total of 2.00 from holding Payden High Income or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Natural Resources vs. Payden High Income
Performance |
| Timeline |
| Thrivent Natural Res |
| Payden High Income |
Thrivent Natural and Payden High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Natural and Payden High
The main advantage of trading using opposite Thrivent Natural and Payden High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Natural position performs unexpectedly, Payden 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 Payden High will offset losses from the drop in Payden High's long position.| Thrivent Natural vs. Touchstone Ultra Short | Thrivent Natural vs. Siit Ultra Short | Thrivent Natural vs. Quantitative Longshort Equity | Thrivent Natural vs. Cmg Ultra Short |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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