Correlation Between Thrivent Natural and Templeton World
Can any of the company-specific risk be diversified away by investing in both Thrivent Natural and Templeton World 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 Templeton World 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 Templeton World Fund, you can compare the effects of market volatilities on Thrivent Natural and Templeton World 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 Templeton World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Natural and Templeton World.
Diversification Opportunities for Thrivent Natural and Templeton World
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thrivent and Templeton is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Templeton World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton World 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 Templeton World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton World has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Templeton World go up and down completely randomly.
Pair Corralation between Thrivent Natural and Templeton World
Assuming the 90 days horizon Thrivent Natural is expected to generate 2.39 times less return on investment than Templeton World. But when comparing it to its historical volatility, Thrivent Natural Resources is 11.19 times less risky than Templeton World. It trades about 0.31 of its potential returns per unit of risk. Templeton World Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,394 in Templeton World Fund on November 8, 2024 and sell it today you would earn a total of 350.00 from holding Templeton World Fund or generate 25.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.49% |
| Values | Daily Returns |
Thrivent Natural Resources vs. Templeton World Fund
Performance |
| Timeline |
| Thrivent Natural Res |
| Templeton World |
Thrivent Natural and Templeton World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Natural and Templeton World
The main advantage of trading using opposite Thrivent Natural and Templeton World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Natural position performs unexpectedly, Templeton World 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 Templeton World will offset losses from the drop in Templeton World's long position.| Thrivent Natural vs. Pace Municipal Fixed | Thrivent Natural vs. Nuveen Strategic Municipal | Thrivent Natural vs. Franklin Adjustable Government | Thrivent Natural vs. Ishares Municipal Bond |
| Templeton World vs. Great West Loomis Sayles | Templeton World vs. Small Cap Value Profund | Templeton World vs. Mid Cap Growth Profund | Templeton World vs. Boston Partners Small |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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