Correlation Between Thrivent Small and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Thrivent Small and Investec Emerging 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 Small and Investec Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent Small Cap and Investec Emerging Markets, you can compare the effects of market volatilities on Thrivent Small and Investec Emerging 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 Small with a short position of Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Small and Investec Emerging.
Diversification Opportunities for Thrivent Small and Investec Emerging
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thrivent and Investec is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Small Cap and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets and Thrivent Small 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 Small Cap are associated (or correlated) with Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Thrivent Small i.e., Thrivent Small and Investec Emerging go up and down completely randomly.
Pair Corralation between Thrivent Small and Investec Emerging
Assuming the 90 days horizon Thrivent Small Cap is expected to generate 1.4 times more return on investment than Investec Emerging. However, Thrivent Small is 1.4 times more volatile than Investec Emerging Markets. It trades about 0.04 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.05 per unit of risk. If you would invest 2,901 in Thrivent Small Cap on August 30, 2024 and sell it today you would earn a total of 635.00 from holding Thrivent Small Cap or generate 21.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Small Cap vs. Investec Emerging Markets
Performance |
| Timeline |
| Thrivent Small Cap |
| Investec Emerging Markets |
Thrivent Small and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Small and Investec Emerging
The main advantage of trading using opposite Thrivent Small and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Small position performs unexpectedly, Investec Emerging 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 Investec Emerging will offset losses from the drop in Investec Emerging's long position.| Thrivent Small vs. Vanguard Small Cap Index | Thrivent Small vs. Vanguard Small Cap Index | Thrivent Small vs. Vanguard Small Cap Index | Thrivent Small vs. Vanguard Small Cap Index |
| Investec Emerging vs. Ab High Income | Investec Emerging vs. Vanguard High Yield Tax Exempt | Investec Emerging vs. Victory High Income | Investec Emerging vs. Calvert High Yield |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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