Correlation Between The Us and Thrivent Government

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Can any of the company-specific risk be diversified away by investing in both The Us and Thrivent 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 The Us and Thrivent Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Us Government and Thrivent Government Bond, you can compare the effects of market volatilities on The Us and Thrivent 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 The Us with a short position of Thrivent Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Us and Thrivent Government.

Diversification Opportunities for The Us and Thrivent Government

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between The and Thrivent is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding THE US GOVERNMENT and THRIVENT GOVERNMENT BOND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Government Bond and The Us 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 The Us Government are associated (or correlated) with Thrivent Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Government Bond has no effect on the direction of The Us i.e., The Us and Thrivent Government go up and down completely randomly.

Pair Corralation between The Us and Thrivent Government

Assuming the 90 days horizon The Us is expected to generate 1.19 times less return on investment than Thrivent Government. But when comparing it to its historical volatility, The Us Government is 1.14 times less risky than Thrivent Government. It trades about 0.1 of its potential returns per unit of risk. Thrivent Government Bond is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  825.00  in Thrivent Government Bond on December 29, 2023 and sell it today you would earn a total of  49.00  from holding Thrivent Government Bond or generate 5.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.19%
ValuesDaily Returns

THE US GOVERNMENT  vs.  THRIVENT GOVERNMENT BOND

 Performance 
       Timeline  
The Us Government 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days The Us Government has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, The Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Thrivent Government Bond 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Thrivent Government Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Thrivent Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

The Us and Thrivent Government Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with The Us and Thrivent Government

The main advantage of trading using opposite The Us and Thrivent Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Us position performs unexpectedly, Thrivent 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 Thrivent Government will offset losses from the drop in Thrivent Government's long position.
The idea behind The Us Government and Thrivent Government Bond 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.
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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