Correlation Between Thrivent High and Us Treasury

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

Diversification Opportunities for Thrivent High and Us Treasury

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Thrivent and PRULX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Us Treasury Long Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Treasury Long and Thrivent 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 Thrivent High Yield are associated (or correlated) with Us Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Treasury Long has no effect on the direction of Thrivent High i.e., Thrivent High and Us Treasury go up and down completely randomly.

Pair Corralation between Thrivent High and Us Treasury

Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.23 times more return on investment than Us Treasury. However, Thrivent High Yield is 4.31 times less risky than Us Treasury. It trades about 0.34 of its potential returns per unit of risk. Us Treasury Long Term is currently generating about -0.03 per unit of risk. If you would invest  414.00  in Thrivent High Yield on April 22, 2024 and sell it today you would earn a total of  6.00  from holding Thrivent High Yield or generate 1.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Thrivent High Yield  vs.  Us Treasury Long Term

 Performance 
       Timeline  
Thrivent High Yield 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thrivent High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Us Treasury Long 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Us Treasury Long Term are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Us Treasury is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thrivent High and Us Treasury Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Thrivent High and Us Treasury

The main advantage of trading using opposite Thrivent High and Us Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Us Treasury 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 Us Treasury will offset losses from the drop in Us Treasury's long position.
The idea behind Thrivent High Yield and Us Treasury Long Term 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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