Correlation Between Gamco Natural and Thrivent Large

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

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

Diversification Opportunities for Gamco Natural and Thrivent Large

0.19

Correlation Coefficient

Gamco Natural  Thrivent Large

Average diversification

The 3 months correlation between Gamco and Thrivent is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Thrivent Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Large Cap and Gamco Natural 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 Gamco Natural Resources are associated (or correlated) with Thrivent Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Large Cap has no effect on the direction of Gamco Natural i.e., Gamco Natural and Thrivent Large go up and down completely randomly.

Pair Corralation between Gamco Natural and Thrivent Large

Assuming the 90 days horizon Gamco Natural is expected to generate 4.85 times less return on investment than Thrivent Large. But when comparing it to its historical volatility, Gamco Natural Resources is 1.5 times less risky than Thrivent Large. It trades about 0.03 of its potential returns per unit of risk. Thrivent Large Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,014  in Thrivent Large Cap on September 2, 2024 and sell it today you would earn a total of  298.00  from holding Thrivent Large Cap or generate 14.8% return on investment over 90 days.

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

Gamco Natural Resources  vs.  Thrivent Large Cap

Gamco Natural Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Natural Resources are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gamco Natural is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thrivent Large Cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Large Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Thrivent Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gamco Natural and Thrivent Large

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

The idea behind Gamco Natural Resources and Thrivent Large Cap 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.