Correlation Between Thrivent Natural and Smallcap Growth
Can any of the company-specific risk be diversified away by investing in both Thrivent Natural and Smallcap 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 Smallcap 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 Smallcap Growth Fund, you can compare the effects of market volatilities on Thrivent Natural and Smallcap 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 Smallcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Natural and Smallcap Growth.
Diversification Opportunities for Thrivent Natural and Smallcap Growth
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thrivent and Smallcap is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap 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 Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Smallcap Growth go up and down completely randomly.
Pair Corralation between Thrivent Natural and Smallcap Growth
Assuming the 90 days horizon Thrivent Natural is expected to generate 6.17 times less return on investment than Smallcap Growth. But when comparing it to its historical volatility, Thrivent Natural Resources is 16.56 times less risky than Smallcap Growth. It trades about 0.48 of its potential returns per unit of risk. Smallcap Growth Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,496 in Smallcap Growth Fund on October 23, 2024 and sell it today you would earn a total of 46.00 from holding Smallcap Growth Fund or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent Natural Resources vs. Smallcap Growth Fund
Performance |
| Timeline |
| Thrivent Natural Res |
| Smallcap Growth |
Thrivent Natural and Smallcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent Natural and Smallcap Growth
The main advantage of trading using opposite Thrivent Natural and Smallcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Natural position performs unexpectedly, Smallcap 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 Smallcap Growth will offset losses from the drop in Smallcap Growth's long position.| Thrivent Natural vs. Center St Mlp | Thrivent Natural vs. Rbb Fund | Thrivent Natural vs. Fabwx | Thrivent Natural vs. Fvkvwx |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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