Correlation Between Thrivent High and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Thrivent High and Templeton Growth 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 Templeton Growth 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 Templeton Growth Fund, you can compare the effects of market volatilities on Thrivent High and Templeton Growth 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 Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and Templeton Growth.
Diversification Opportunities for Thrivent High and Templeton Growth
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and Templeton is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth 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 Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Thrivent High i.e., Thrivent High and Templeton Growth go up and down completely randomly.
Pair Corralation between Thrivent High and Templeton Growth
Assuming the 90 days horizon Thrivent High Yield is expected to generate about the same return on investment as Templeton Growth Fund. But, Thrivent High Yield is 3.9 times less risky than Templeton Growth. It trades about 0.09 of its potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.02 per unit of risk. If you would invest 2,625 in Templeton Growth Fund on December 30, 2024 and sell it today you would earn a total of 26.00 from holding Templeton Growth Fund or generate 0.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Thrivent High Yield vs. Templeton Growth Fund
Performance |
Timeline |
Thrivent High Yield |
Templeton Growth |
Thrivent High and Templeton Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thrivent High and Templeton Growth
The main advantage of trading using opposite Thrivent High and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, Templeton Growth 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 Templeton Growth will offset losses from the drop in Templeton Growth'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 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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