Correlation Between James Balanced and Thrivent Small
Can any of the company-specific risk be diversified away by investing in both James Balanced and Thrivent Small 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 James Balanced and Thrivent Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Balanced Golden and Thrivent Small Cap, you can compare the effects of market volatilities on James Balanced and Thrivent Small 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 James Balanced with a short position of Thrivent Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Balanced and Thrivent Small.
Diversification Opportunities for James Balanced and Thrivent Small
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and Thrivent is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden and Thrivent Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Small Cap and James Balanced 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 James Balanced Golden are associated (or correlated) with Thrivent Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Small Cap has no effect on the direction of James Balanced i.e., James Balanced and Thrivent Small go up and down completely randomly.
Pair Corralation between James Balanced and Thrivent Small
Assuming the 90 days horizon James Balanced is expected to generate 2.81 times less return on investment than Thrivent Small. But when comparing it to its historical volatility, James Balanced Golden is 3.53 times less risky than Thrivent Small. It trades about 0.36 of its potential returns per unit of risk. Thrivent Small Cap is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,271 in Thrivent Small Cap on September 4, 2024 and sell it today you would earn a total of 278.00 from holding Thrivent Small Cap or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Balanced Golden vs. Thrivent Small Cap
Performance |
| Timeline |
| James Balanced Golden |
| Thrivent Small Cap |
James Balanced and Thrivent Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Balanced and Thrivent Small
The main advantage of trading using opposite James Balanced and Thrivent Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Balanced position performs unexpectedly, Thrivent Small 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 Small will offset losses from the drop in Thrivent Small's long position.| James Balanced vs. Permanent Portfolio Class | James Balanced vs. Berwyn Income Fund | James Balanced vs. Large Cap Fund | James Balanced vs. Westcore Plus Bond |
| Thrivent Small vs. Templeton Emerging Markets | Thrivent Small vs. Black Oak Emerging | Thrivent Small vs. Ep Emerging Markets | Thrivent Small vs. T Rowe Price |
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 CEOs Directory module to screen CEOs from public companies around the world.
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