Correlation Between Thrivent Small and Litman Gregory
Can any of the company-specific risk be diversified away by investing in both Thrivent Small and Litman Gregory 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 Small and Litman Gregory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent Small Cap and Litman Gregory Masters, you can compare the effects of market volatilities on Thrivent Small and Litman Gregory 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 Small with a short position of Litman Gregory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Small and Litman Gregory.
Diversification Opportunities for Thrivent Small and Litman Gregory
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thrivent and Litman is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Small Cap and Litman Gregory Masters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litman Gregory Masters and Thrivent Small 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 Small Cap are associated (or correlated) with Litman Gregory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litman Gregory Masters has no effect on the direction of Thrivent Small i.e., Thrivent Small and Litman Gregory go up and down completely randomly.
Pair Corralation between Thrivent Small and Litman Gregory
Assuming the 90 days horizon Thrivent Small Cap is expected to generate 9.88 times more return on investment than Litman Gregory. However, Thrivent Small is 9.88 times more volatile than Litman Gregory Masters. It trades about 0.1 of its potential returns per unit of risk. Litman Gregory Masters is currently generating about 0.29 per unit of risk. If you would invest 2,252 in Thrivent Small Cap on September 3, 2024 and sell it today you would earn a total of 337.00 from holding Thrivent Small Cap or generate 14.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Small Cap vs. Litman Gregory Masters
Performance |
| Timeline |
| Thrivent Small Cap |
| Litman Gregory Masters |
Thrivent Small and Litman Gregory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Small and Litman Gregory
The main advantage of trading using opposite Thrivent Small and Litman Gregory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Small position performs unexpectedly, Litman Gregory 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 Litman Gregory will offset losses from the drop in Litman Gregory's long position.| Thrivent Small vs. Ashmore Emerging Markets | Thrivent Small vs. Wt Mutual Fund | Thrivent Small vs. First American Funds | Thrivent Small vs. Matson Money Equity |
| Litman Gregory vs. Vanguard Financials Index | Litman Gregory vs. Icon Financial Fund | Litman Gregory vs. Blackrock Financial Institutions | Litman Gregory vs. Mesirow Financial Small |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |