Correlation Between Thrivent Natural and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Thrivent Natural and Europacific Growth 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 Natural and Europacific Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent Natural Resources and Europacific Growth Fund, you can compare the effects of market volatilities on Thrivent Natural and Europacific Growth 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 Natural with a short position of Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Natural and Europacific Growth.
Diversification Opportunities for Thrivent Natural and Europacific Growth
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thrivent and Europacific is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth and Thrivent Natural 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 Natural Resources are associated (or correlated) with Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Europacific Growth go up and down completely randomly.
Pair Corralation between Thrivent Natural and Europacific Growth
Assuming the 90 days horizon Thrivent Natural is expected to generate 6.44 times less return on investment than Europacific Growth. But when comparing it to its historical volatility, Thrivent Natural Resources is 12.41 times less risky than Europacific Growth. It trades about 0.48 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 5,417 in Europacific Growth Fund on October 25, 2024 and sell it today you would earn a total of 176.00 from holding Europacific Growth Fund or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Natural Resources vs. Europacific Growth Fund
Performance |
| Timeline |
| Thrivent Natural Res |
| Europacific Growth |
Thrivent Natural and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Natural and Europacific Growth
The main advantage of trading using opposite Thrivent Natural and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Natural position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth's long position.| Thrivent Natural vs. Vanguard Total Stock | Thrivent Natural vs. Vanguard 500 Index | Thrivent Natural vs. Vanguard Total Stock | Thrivent Natural vs. Vanguard Total Stock |
| Europacific Growth vs. Thrivent Natural Resources | Europacific Growth vs. Fidelity Advisor Energy | Europacific Growth vs. Goldman Sachs Mlp | Europacific Growth vs. Salient Mlp Energy |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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