Correlation Between Thrivent Moderate and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both Thrivent Moderate and The Arbitrage 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 Moderate and The Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent Moderate Allocation and The Arbitrage Fund, you can compare the effects of market volatilities on Thrivent Moderate and The Arbitrage 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 Moderate with a short position of The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Moderate and The Arbitrage.
Diversification Opportunities for Thrivent Moderate and The Arbitrage
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thrivent and The is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Moderate Allocation and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Arbitrage and Thrivent Moderate 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 Moderate Allocation are associated (or correlated) with The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Arbitrage has no effect on the direction of Thrivent Moderate i.e., Thrivent Moderate and The Arbitrage go up and down completely randomly.
Pair Corralation between Thrivent Moderate and The Arbitrage
Assuming the 90 days horizon Thrivent Moderate Allocation is expected to generate 1.65 times more return on investment than The Arbitrage. However, Thrivent Moderate is 1.65 times more volatile than The Arbitrage Fund. It trades about 0.38 of its potential returns per unit of risk. The Arbitrage Fund is currently generating about 0.05 per unit of risk. If you would invest 1,638 in Thrivent Moderate Allocation on September 1, 2024 and sell it today you would earn a total of 64.00 from holding Thrivent Moderate Allocation or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Moderate Allocation vs. The Arbitrage Fund
Performance |
| Timeline |
| Thrivent Moderate |
| The Arbitrage |
Thrivent Moderate and The Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Moderate and The Arbitrage
The main advantage of trading using opposite Thrivent Moderate and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Moderate position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.| Thrivent Moderate vs. Tiaa Cref Real Estate | Thrivent Moderate vs. Virtus Real Estate | Thrivent Moderate vs. Prudential Real Estate | Thrivent Moderate vs. Dunham Real Estate |
| The Arbitrage vs. The Merger Fund | The Arbitrage vs. Calamos Market Neutral | The Arbitrage vs. Hussman Strategic Growth | The Arbitrage vs. Gateway Fund Class |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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