Correlation Between Thrivent Limited and Aig Government

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

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

Diversification Opportunities for Thrivent Limited and Aig Government

0.68

Correlation Coefficient

Thrivent Limited  Aig Government

Poor diversification

The 3 months correlation between Thrivent and Aig is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Limited Maturity and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money and Thrivent Limited 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 Limited Maturity are associated (or correlated) with Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Thrivent Limited i.e., Thrivent Limited and Aig Government go up and down completely randomly.

Pair Corralation between Thrivent Limited and Aig Government

Assuming the 90 days horizon Thrivent Limited Maturity is expected to generate 0.69 times more return on investment than Aig Government. However, Thrivent Limited Maturity is 1.44 times less risky than Aig Government. It trades about 0.25 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.06 per unit of risk. If you would invest  1,224  in Thrivent Limited Maturity on December 22, 2024 and sell it today you would earn a total of  22.00  from holding Thrivent Limited Maturity or generate 1.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Thrivent Limited Maturity  vs.  Aig Government Money

Thrivent Limited Maturity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Limited Maturity are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Thrivent Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aig Government Money

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aig Government Money are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aig Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thrivent Limited and Aig Government

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

The idea behind Thrivent Limited Maturity and Aig Government Money 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.