Correlation Between Thrivent High and Magic Empire
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Magic Empire 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 Magic Empire 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 Magic Empire Global, you can compare the effects of market volatilities on Thrivent High and Magic Empire 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 Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Magic Empire.
Diversification Opportunities for Thrivent High and Magic Empire
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thrivent and Magic is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Magic Empire Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magic Empire Global 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 Magic Empire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magic Empire Global has no effect on the direction of Thrivent High i.e., Thrivent High and Magic Empire go up and down completely randomly.
Pair Corralation between Thrivent High and Magic Empire
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.07 times more return on investment than Magic Empire. However, Thrivent High Yield is 15.12 times less risky than Magic Empire. It trades about -0.29 of its potential returns per unit of risk. Magic Empire Global is currently generating about -0.18 per unit of risk. If you would invest 426.00 in Thrivent High Yield on September 26, 2024 and sell it today you would lose (5.00) from holding Thrivent High Yield or give up 1.17% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Thrivent High Yield vs. Magic Empire Global
Performance |
Timeline |
Thrivent High Yield |
Magic Empire Global |
Thrivent High and Magic Empire Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thrivent High and Magic Empire
The main advantage of trading using opposite Thrivent High and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Magic Empire 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 Magic Empire will offset losses from the drop in Magic Empire's long position.Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Income Fund | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap |
Magic Empire vs. Aquagold International | Magic Empire vs. Morningstar Unconstrained Allocation | Magic Empire vs. Thrivent High Yield | Magic Empire vs. Via Renewables |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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