Correlation Between Thrivent Natural and Aig Government
Can any of the company-specific risk be diversified away by investing in both Thrivent Natural and Aig 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 Thrivent Natural and Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Thrivent Natural and Aig 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 Thrivent Natural with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Natural and Aig Government.
Diversification Opportunities for Thrivent Natural and Aig Government
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thrivent and Aig is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Aig Government go up and down completely randomly.
Pair Corralation between Thrivent Natural and Aig Government
Assuming the 90 days horizon Thrivent Natural Resources is expected to generate 0.38 times more return on investment than Aig Government. However, Thrivent Natural Resources is 2.63 times less risky than Aig Government. It trades about 0.46 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.12 per unit of risk. If you would invest 993.00 in Thrivent Natural Resources on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Thrivent Natural Resources or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Natural Resources vs. Aig Government Money
Performance |
| Timeline |
| Thrivent Natural Res |
| Aig Government Money |
Thrivent Natural and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Natural and Aig Government
The main advantage of trading using opposite Thrivent Natural and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Natural position performs unexpectedly, Aig 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 Aig Government will offset losses from the drop in Aig Government's long position.| Thrivent Natural vs. Blackrock Health Sciences | Thrivent Natural vs. Health Care Ultrasector | Thrivent Natural vs. Alger Health Sciences | Thrivent Natural vs. Allianzgi Health Sciences |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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