Correlation Between Thrivent Aggressive and Stock Index
Can any of the company-specific risk be diversified away by investing in both Thrivent Aggressive and Stock Index 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 Aggressive and Stock Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent Aggressive Allocation and Stock Index Fund, you can compare the effects of market volatilities on Thrivent Aggressive and Stock Index 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 Aggressive with a short position of Stock Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Aggressive and Stock Index.
Diversification Opportunities for Thrivent Aggressive and Stock Index
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Thrivent and Stock is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Aggressive Allocation and Stock Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Index Fund and Thrivent Aggressive 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 Aggressive Allocation are associated (or correlated) with Stock Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Index Fund has no effect on the direction of Thrivent Aggressive i.e., Thrivent Aggressive and Stock Index go up and down completely randomly.
Pair Corralation between Thrivent Aggressive and Stock Index
Assuming the 90 days horizon Thrivent Aggressive is expected to generate 1.08 times less return on investment than Stock Index. But when comparing it to its historical volatility, Thrivent Aggressive Allocation is 1.06 times less risky than Stock Index. It trades about 0.36 of its potential returns per unit of risk. Stock Index Fund is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 4,158 in Stock Index Fund on September 3, 2024 and sell it today you would earn a total of 237.00 from holding Stock Index Fund or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Aggressive Allocation vs. Stock Index Fund
Performance |
| Timeline |
| Thrivent Aggressive |
| Stock Index Fund |
Thrivent Aggressive and Stock Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Aggressive and Stock Index
The main advantage of trading using opposite Thrivent Aggressive and Stock Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Aggressive position performs unexpectedly, Stock Index 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 Stock Index will offset losses from the drop in Stock Index's long position.| Thrivent Aggressive vs. Thrivent Moderately Aggressive | Thrivent Aggressive vs. Thrivent Moderate Allocation | Thrivent Aggressive vs. Thrivent Large Cap | Thrivent Aggressive vs. Thrivent Mid Cap |
| Stock Index vs. Vanguard Total Stock | Stock Index vs. Vanguard 500 Index | Stock Index vs. Vanguard Total Stock | Stock Index vs. Vanguard Total Stock |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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