Correlation Between Quantitative and Thrivent Natural

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

By analyzing existing cross correlation between Quantitative Longshort Equity and Thrivent Natural Resources, you can compare the effects of market volatilities on Quantitative and Thrivent Natural 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 Quantitative with a short position of Thrivent Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative and Thrivent Natural.

Diversification Opportunities for Quantitative and Thrivent Natural

-0.58

Correlation Coefficient

Quantitative  Thrivent Natural

Excellent diversification

The 3 months correlation between Quantitative and Thrivent is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Thrivent Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Natural Res and Quantitative 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 Quantitative Longshort Equity are associated (or correlated) with Thrivent Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Natural Res has no effect on the direction of Quantitative i.e., Quantitative and Thrivent Natural go up and down completely randomly.

Pair Corralation between Quantitative and Thrivent Natural

Assuming the 90 days horizon Quantitative Longshort Equity is expected to under-perform the Thrivent Natural. In addition to that, Quantitative is 4.56 times more volatile than Thrivent Natural Resources. It trades about -0.23 of its total potential returns per unit of risk. Thrivent Natural Resources is currently generating about 0.35 per unit of volatility. If you would invest  999.00  in Thrivent Natural Resources on December 4, 2024 and sell it today you would earn a total of  6.00  from holding Thrivent Natural Resources or generate 0.6% return on investment over 90 days.

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

Quantitative Longshort Equity  vs.  Thrivent Natural Resources

Quantitative Longshort

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quantitative Longshort Equity 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.

Thrivent Natural Res

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Natural Resources are ranked lower than 35 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thrivent Natural is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Quantitative and Thrivent Natural

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

The idea behind Quantitative Longshort Equity and Thrivent Natural Resources 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.