Correlation Between Kinetics Small and Thrivent Partner

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

By analyzing existing cross correlation between Kinetics Small Cap and Thrivent Partner Worldwide, you can compare the effects of market volatilities on Kinetics Small and Thrivent Partner 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 Kinetics Small with a short position of Thrivent Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Thrivent Partner.

Diversification Opportunities for Kinetics Small and Thrivent Partner

0.47

Correlation Coefficient

Kinetics Small  Thrivent Partner

Very weak diversification

The 3 months correlation between Kinetics and Thrivent is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Thrivent Partner Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Partner Wor and Kinetics Small 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 Kinetics Small Cap are associated (or correlated) with Thrivent Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Partner Wor has no effect on the direction of Kinetics Small i.e., Kinetics Small and Thrivent Partner go up and down completely randomly.

Pair Corralation between Kinetics Small and Thrivent Partner

Assuming the 90 days horizon Kinetics Small is expected to generate 1.32 times less return on investment than Thrivent Partner. In addition to that, Kinetics Small is 2.54 times more volatile than Thrivent Partner Worldwide. It trades about 0.05 of its total potential returns per unit of risk. Thrivent Partner Worldwide is currently generating about 0.16 per unit of volatility. If you would invest  1,031  in Thrivent Partner Worldwide on December 23, 2024 and sell it today you would earn a total of  82.00  from holding Thrivent Partner Worldwide or generate 7.95% return on investment over 90 days.

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

Kinetics Small Cap  vs.  Thrivent Partner Worldwide

Kinetics Small Cap

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Small Cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Kinetics Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thrivent Partner Wor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Partner Worldwide are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Thrivent Partner may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kinetics Small and Thrivent Partner

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

The idea behind Kinetics Small Cap and Thrivent Partner Worldwide 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.