Correlation Between Ford and Thrivent Income

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

By analyzing existing cross correlation between Ford Motor and Thrivent Income Fund, you can compare the effects of market volatilities on Ford and Thrivent Income 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 Ford with a short position of Thrivent Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Thrivent Income.

Diversification Opportunities for Ford and Thrivent Income

0.24

Correlation Coefficient

Ford  Thrivent Income

Modest diversification

The 3 months correlation between Ford and Thrivent is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Thrivent Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Income and Ford 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 Ford Motor are associated (or correlated) with Thrivent Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Income has no effect on the direction of Ford i.e., Ford and Thrivent Income go up and down completely randomly.

Pair Corralation between Ford and Thrivent Income

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Thrivent Income. In addition to that, Ford is 5.56 times more volatile than Thrivent Income Fund. It trades about -0.01 of its total potential returns per unit of risk. Thrivent Income Fund is currently generating about 0.05 per unit of volatility. If you would invest  742.00  in Thrivent Income Fund on November 27, 2024 and sell it today you would earn a total of  73.00  from holding Thrivent Income Fund or generate 9.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ford Motor  vs.  Thrivent Income Fund

Ford Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Thrivent Income

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Income Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thrivent Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ford and Thrivent Income

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

The idea behind Ford Motor and Thrivent Income Fund 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.