Correlation Between Thrivent Money and American Funds

Can any of the company-specific risk be diversified away by investing in both Thrivent Money and American Funds 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 Money and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thrivent Money Market and American Funds New, you can compare the effects of market volatilities on Thrivent Money and American Funds 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 Money with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Money and American Funds.

Diversification Opportunities for Thrivent Money and American Funds

0.0

Correlation Coefficient

Thrivent Money  American Funds

Pay attention - limited upside

The 3 months correlation between Thrivent and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Money Market and American Funds New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds New and Thrivent Money 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 Money Market are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds New has no effect on the direction of Thrivent Money i.e., Thrivent Money and American Funds go up and down completely randomly.

Pair Corralation between Thrivent Money and American Funds

Assuming the 90 days horizon Thrivent Money Market is expected to generate 63.81 times more return on investment than American Funds. However, Thrivent Money is 63.81 times more volatile than American Funds New. It trades about 0.1 of its potential returns per unit of risk. American Funds New is currently generating about 0.04 per unit of risk. If you would invest  402.00  in Thrivent Money Market on September 30, 2024 and sell it today you would lose (302.00) from holding Thrivent Money Market or give up 75.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	53.32%
Values	Daily Returns

Thrivent Money Market  vs.  American Funds New

Thrivent Money Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thrivent Money Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Thrivent Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

American Funds New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Funds New has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Thrivent Money and American Funds

The main advantage of trading using opposite Thrivent Money and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Money position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.

The idea behind Thrivent Money Market and American Funds New pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.