Correlation Between Thrivent High and EMCORE
Can any of the company-specific risk be diversified away by investing in both Thrivent High and EMCORE 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 EMCORE 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 EMCORE, you can compare the effects of market volatilities on Thrivent High and EMCORE 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 EMCORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and EMCORE.
Diversification Opportunities for Thrivent High and EMCORE
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thrivent and EMCORE is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and EMCORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCORE 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 EMCORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCORE has no effect on the direction of Thrivent High i.e., Thrivent High and EMCORE go up and down completely randomly.
Pair Corralation between Thrivent High and EMCORE
Assuming the 90 days horizon Thrivent High Yield is expected to generate 0.06 times more return on investment than EMCORE. However, Thrivent High Yield is 15.79 times less risky than EMCORE. It trades about -0.26 of its potential returns per unit of risk. EMCORE is currently generating about -0.24 per unit of risk. If you would invest 417.00 in Thrivent High Yield on January 30, 2024 and sell it today you would lose (6.00) from holding Thrivent High Yield or give up 1.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Thrivent High Yield vs. EMCORE
Performance |
Timeline |
Thrivent High Yield |
EMCORE |
Thrivent High and EMCORE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thrivent High and EMCORE
The main advantage of trading using opposite Thrivent High and EMCORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, EMCORE 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 EMCORE will offset losses from the drop in EMCORE's long position.Thrivent High vs. Vanguard High Yield Corporate | Thrivent High vs. Vanguard High Yield Porate | Thrivent High vs. Blackrock Hi Yld | Thrivent High vs. Blackrock High Yield |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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