Correlation Between Balanced Fund and Thrivent Moderate
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Thrivent Moderate 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 Balanced Fund and Thrivent Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Thrivent Moderate Allocation, you can compare the effects of market volatilities on Balanced Fund and Thrivent Moderate 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 Balanced Fund with a short position of Thrivent Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Thrivent Moderate.
Diversification Opportunities for Balanced Fund and Thrivent Moderate
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Balanced and Thrivent is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Thrivent Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Moderate and Balanced Fund 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 Balanced Fund Investor are associated (or correlated) with Thrivent Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Moderate has no effect on the direction of Balanced Fund i.e., Balanced Fund and Thrivent Moderate go up and down completely randomly.
Pair Corralation between Balanced Fund and Thrivent Moderate
Assuming the 90 days horizon Balanced Fund is expected to generate 1.29 times less return on investment than Thrivent Moderate. In addition to that, Balanced Fund is 1.02 times more volatile than Thrivent Moderate Allocation. It trades about 0.14 of its total potential returns per unit of risk. Thrivent Moderate Allocation is currently generating about 0.18 per unit of volatility. If you would invest 1,664 in Thrivent Moderate Allocation on August 29, 2024 and sell it today you would earn a total of 37.00 from holding Thrivent Moderate Allocation or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Investor vs. Thrivent Moderate Allocation
Performance |
| Timeline |
| Balanced Fund Investor |
| Thrivent Moderate |
Balanced Fund and Thrivent Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Thrivent Moderate
The main advantage of trading using opposite Balanced Fund and Thrivent Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Thrivent Moderate 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 Thrivent Moderate will offset losses from the drop in Thrivent Moderate's long position.| Balanced Fund vs. Select Fund Investor | Balanced Fund vs. Heritage Fund Investor | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. Growth Fund Investor |
| Thrivent Moderate vs. American Balanced Fund | Thrivent Moderate vs. American Balanced Fund | Thrivent Moderate vs. HUMANA INC | Thrivent Moderate vs. Aquagold International |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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