Correlation Between Thrivent Large and Thrivent Low

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

By analyzing existing cross correlation between Thrivent Large Cap and Thrivent Low Volatility, you can compare the effects of market volatilities on Thrivent Large and Thrivent Low 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 Large with a short position of Thrivent Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Large and Thrivent Low.

Diversification Opportunities for Thrivent Large and Thrivent Low

-0.68

Correlation Coefficient

Thrivent Large  Thrivent Low

Excellent diversification

The 3 months correlation between Thrivent and Thrivent is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Large Cap and Thrivent Low Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Low Volatility and Thrivent Large 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 Large Cap are associated (or correlated) with Thrivent Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Low Volatility has no effect on the direction of Thrivent Large i.e., Thrivent Large and Thrivent Low go up and down completely randomly.

Pair Corralation between Thrivent Large and Thrivent Low

Assuming the 90 days horizon Thrivent Large Cap is expected to generate 0.55 times more return on investment than Thrivent Low. However, Thrivent Large Cap is 1.83 times less risky than Thrivent Low. It trades about 0.07 of its potential returns per unit of risk. Thrivent Low Volatility is currently generating about -0.12 per unit of risk. If you would invest  2,150  in Thrivent Large Cap on September 14, 2024 and sell it today you would earn a total of  101.00  from holding Thrivent Large Cap or generate 4.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Thrivent Large Cap  vs.  Thrivent Low Volatility

Thrivent Large Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Large Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Thrivent Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thrivent Low Volatility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thrivent Low Volatility has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Thrivent Large and Thrivent Low

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

The idea behind Thrivent Large Cap and Thrivent Low Volatility 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.