Correlation Between Thrivent Income and Thrivent Small

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

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

Diversification Opportunities for Thrivent Income and Thrivent Small

-0.54

Correlation Coefficient

Thrivent Income  Thrivent Small

Excellent diversification

The 3 months correlation between Thrivent and Thrivent is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Income Fund and Thrivent Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Small Cap and Thrivent Income 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 Income Fund are associated (or correlated) with Thrivent Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Small Cap has no effect on the direction of Thrivent Income i.e., Thrivent Income and Thrivent Small go up and down completely randomly.

Pair Corralation between Thrivent Income and Thrivent Small

Assuming the 90 days horizon Thrivent Income is expected to generate 336.0 times less return on investment than Thrivent Small. But when comparing it to its historical volatility, Thrivent Income Fund is 3.41 times less risky than Thrivent Small. It trades about 0.0 of its potential returns per unit of risk. Thrivent Small Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,201  in Thrivent Small Cap on September 3, 2024 and sell it today you would earn a total of  351.00  from holding Thrivent Small Cap or generate 10.97% return on investment over 90 days.

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

Thrivent Income Fund  vs.  Thrivent Small Cap

Thrivent Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thrivent Income Fund has generated negative risk-adjusted returns adding no value to fund investors. 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.

Thrivent Small Cap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Small Cap 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 Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Thrivent Income and Thrivent Small

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

The idea behind Thrivent Income Fund and Thrivent Small Cap 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.