Correlation Between Mondrian Emerging and Thrivent Opportunity

Can any of the company-specific risk be diversified away by investing in both Mondrian Emerging and Thrivent Opportunity 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 Mondrian Emerging and Thrivent Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mondrian Emerging Markets and Thrivent Opportunity Income, you can compare the effects of market volatilities on Mondrian Emerging and Thrivent Opportunity 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 Mondrian Emerging with a short position of Thrivent Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mondrian Emerging and Thrivent Opportunity.

Diversification Opportunities for Mondrian Emerging and Thrivent Opportunity

0.33

Correlation Coefficient

Mondrian Emerging  Thrivent Opportunity

Weak diversification

The 3 months correlation between Mondrian and Thrivent is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mondrian Emerging Markets and Thrivent Opportunity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Opportunity and Mondrian Emerging 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 Mondrian Emerging Markets are associated (or correlated) with Thrivent Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Opportunity has no effect on the direction of Mondrian Emerging i.e., Mondrian Emerging and Thrivent Opportunity go up and down completely randomly.

Pair Corralation between Mondrian Emerging and Thrivent Opportunity

Assuming the 90 days horizon Mondrian Emerging Markets is expected to generate 5.04 times more return on investment than Thrivent Opportunity. However, Mondrian Emerging is 5.04 times more volatile than Thrivent Opportunity Income. It trades about 0.03 of its potential returns per unit of risk. Thrivent Opportunity Income is currently generating about 0.03 per unit of risk. If you would invest  776.00  in Mondrian Emerging Markets on September 4, 2024 and sell it today you would earn a total of  10.00  from holding Mondrian Emerging Markets or generate 1.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Mondrian Emerging Markets  vs.  Thrivent Opportunity Income

Mondrian Emerging Markets

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mondrian Emerging Markets are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Mondrian Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thrivent Opportunity

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Opportunity Income are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Thrivent Opportunity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mondrian Emerging and Thrivent Opportunity

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

The idea behind Mondrian Emerging Markets and Thrivent Opportunity Income 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.