Correlation Between Money Market and Thrivent Large
Can any of the company-specific risk be diversified away by investing in both Money Market 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 Money Market and Thrivent Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Money Market Obligations and Thrivent Large Cap, you can compare the effects of market volatilities on Money Market 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 Money Market with a short position of Thrivent Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Money Market and Thrivent Large.
Diversification Opportunities for Money Market and Thrivent Large
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Money and Thrivent is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Money Market Obligations 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 Money Market 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 Money Market Obligations 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 Money Market i.e., Money Market and Thrivent Large go up and down completely randomly.
Pair Corralation between Money Market and Thrivent Large
Assuming the 90 days horizon Money Market is expected to generate 3.7 times less return on investment than Thrivent Large. But when comparing it to its historical volatility, Money Market Obligations is 4.91 times less risky than Thrivent Large. It trades about 0.14 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 2,545 in Thrivent Large Cap on September 12, 2024 and sell it today you would earn a total of 518.00 from holding Thrivent Large Cap or generate 20.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Money Market Obligations vs. Thrivent Large Cap
Performance |
| Timeline |
| Money Market Obligations |
| Thrivent Large Cap |
Money Market and Thrivent Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Money Market and Thrivent Large
The main advantage of trading using opposite Money Market and Thrivent Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Money Market 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.| Money Market vs. Vanguard Total Stock | Money Market vs. Vanguard 500 Index | Money Market vs. Vanguard Total Stock | Money Market vs. Vanguard Total Stock |
| Thrivent Large vs. Aig Government Money | Thrivent Large vs. Putnam Money Market | Thrivent Large vs. Money Market Obligations | Thrivent Large vs. Matson Money Equity |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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