Correlation Between Thrivent High and IShares Treasury

Can any of the company-specific risk be diversified away by investing in both Thrivent High and IShares 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 IShares 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 iShares Treasury Floating, you can compare the effects of market volatilities on Thrivent High and IShares 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 IShares Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and IShares Treasury.

Diversification Opportunities for Thrivent High and IShares Treasury

0.73

Correlation Coefficient

Thrivent High  IShares Treasury

Poor diversification

The 3 months correlation between Thrivent and IShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and iShares Treasury Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Treasury Floating 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 IShares Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Treasury Floating has no effect on the direction of Thrivent High i.e., Thrivent High and IShares Treasury go up and down completely randomly.

Pair Corralation between Thrivent High and IShares Treasury

Assuming the 90 days horizon Thrivent High is expected to generate 151.0 times less return on investment than IShares Treasury. In addition to that, Thrivent High is 5.97 times more volatile than iShares Treasury Floating. It trades about 0.0 of its total potential returns per unit of risk. iShares Treasury Floating is currently generating about 0.7 per unit of volatility. If you would invest  5,035  in iShares Treasury Floating on December 5, 2024 and sell it today you would earn a total of  16.00  from holding iShares Treasury Floating or generate 0.32% 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.  iShares Treasury Floating

Thrivent High Yield

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent High Yield are ranked lower than 3 (%) 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.

iShares Treasury Floating

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Treasury Floating are ranked lower than 65 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, IShares Treasury is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Thrivent High and IShares Treasury

The main advantage of trading using opposite Thrivent High and IShares Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, IShares 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 IShares Treasury will offset losses from the drop in IShares Treasury's long position.

The idea behind Thrivent High Yield and iShares Treasury Floating 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.