Correlation Between Vanguard High and Thrivent Municipal
Can any of the company-specific risk be diversified away by investing in both Vanguard High and Thrivent Municipal 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 High and Thrivent Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard High Yield Tax Exempt and Thrivent Municipal Bond, you can compare the effects of market volatilities on Vanguard High and Thrivent Municipal 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 High with a short position of Thrivent Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard High and Thrivent Municipal.
Diversification Opportunities for Vanguard High and Thrivent Municipal
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Thrivent is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard High Yield Tax Exempt and Thrivent Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Municipal Bond and Vanguard High 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 High Yield Tax Exempt are associated (or correlated) with Thrivent Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Municipal Bond has no effect on the direction of Vanguard High i.e., Vanguard High and Thrivent Municipal go up and down completely randomly.
Pair Corralation between Vanguard High and Thrivent Municipal
Assuming the 90 days horizon Vanguard High Yield Tax Exempt is expected to generate 1.01 times more return on investment than Thrivent Municipal. However, Vanguard High is 1.01 times more volatile than Thrivent Municipal Bond. It trades about 0.09 of its potential returns per unit of risk. Thrivent Municipal Bond is currently generating about 0.07 per unit of risk. If you would invest 958.00 in Vanguard High Yield Tax Exempt on September 12, 2024 and sell it today you would earn a total of 130.00 from holding Vanguard High Yield Tax Exempt or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vanguard High Yield Tax Exempt vs. Thrivent Municipal Bond
Performance |
| Timeline |
| Vanguard High Yield |
| Thrivent Municipal Bond |
Vanguard High and Thrivent Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard High and Thrivent Municipal
The main advantage of trading using opposite Vanguard High and Thrivent Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard High position performs unexpectedly, Thrivent Municipal 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 Municipal will offset losses from the drop in Thrivent Municipal's long position.| Vanguard High vs. Vanguard Intermediate Term Tax Exempt | Vanguard High vs. Vanguard Long Term Tax Exempt | Vanguard High vs. Vanguard Limited Term Tax Exempt | Vanguard High vs. Vanguard High Yield Porate |
| Thrivent Municipal vs. Virtus Real Estate | Thrivent Municipal vs. Fidelity Real Estate | Thrivent Municipal vs. Jhancock Real Estate | Thrivent Municipal vs. Sa Real Estate |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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