Correlation Between Thrivent Natural and Smallcap World
Can any of the company-specific risk be diversified away by investing in both Thrivent Natural and Smallcap World 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 Smallcap World 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 Smallcap World Fund, you can compare the effects of market volatilities on Thrivent Natural and Smallcap World 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 Smallcap World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Natural and Smallcap World.
Diversification Opportunities for Thrivent Natural and Smallcap World
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thrivent and Smallcap is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Smallcap World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap World 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 Smallcap World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap World has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Smallcap World go up and down completely randomly.
Pair Corralation between Thrivent Natural and Smallcap World
Assuming the 90 days horizon Thrivent Natural Resources is expected to generate 0.46 times more return on investment than Smallcap World. However, Thrivent Natural Resources is 2.16 times less risky than Smallcap World. It trades about -0.15 of its potential returns per unit of risk. Smallcap World Fund is currently generating about -0.42 per unit of risk. If you would invest 1,006 in Thrivent Natural Resources on October 15, 2024 and sell it today you would lose (11.00) from holding Thrivent Natural Resources or give up 1.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Natural Resources vs. Smallcap World Fund
Performance |
| Timeline |
| Thrivent Natural Res |
| Smallcap World |
Thrivent Natural and Smallcap World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Natural and Smallcap World
The main advantage of trading using opposite Thrivent Natural and Smallcap World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Natural position performs unexpectedly, Smallcap World 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 Smallcap World will offset losses from the drop in Smallcap World's long position.| Thrivent Natural vs. Great West Moderately Aggressive | Thrivent Natural vs. Qs Moderate Growth | Thrivent Natural vs. Sierra E Retirement | Thrivent Natural vs. Wealthbuilder Moderate Balanced |
| Smallcap World vs. Rbb Fund Trust | Smallcap World vs. Ab Global Bond | Smallcap World vs. Rbc Global Equity | Smallcap World vs. Artisan Global Opportunities |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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