Correlation Between Vanguard Total and Thrivent High
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Thrivent 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 Vanguard Total and Thrivent High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total International and Thrivent High Yield, you can compare the effects of market volatilities on Vanguard Total and Thrivent 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 Vanguard Total with a short position of Thrivent High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Thrivent High.
Diversification Opportunities for Vanguard Total and Thrivent High
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Thrivent is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Thrivent High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent High Yield and Vanguard Total 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 Vanguard Total International are associated (or correlated) with Thrivent High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent High Yield has no effect on the direction of Vanguard Total i.e., Vanguard Total and Thrivent High go up and down completely randomly.
Pair Corralation between Vanguard Total and Thrivent High
Assuming the 90 days horizon Vanguard Total is expected to generate 1.77 times less return on investment than Thrivent High. But when comparing it to its historical volatility, Vanguard Total International is 1.07 times less risky than Thrivent High. It trades about 0.07 of its potential returns per unit of risk. Thrivent High Yield is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 360.00 in Thrivent High Yield on September 2, 2024 and sell it today you would earn a total of 66.00 from holding Thrivent High Yield or generate 18.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Thrivent High Yield
Performance |
| Timeline |
| Vanguard Total Inter |
| Thrivent High Yield |
Vanguard Total and Thrivent High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Thrivent High
The main advantage of trading using opposite Vanguard Total and Thrivent High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Thrivent 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 Thrivent High will offset losses from the drop in Thrivent High's long position.The idea behind Vanguard Total International and Thrivent High Yield pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Opportunity Income |
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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