Correlation Between Mfs Emerging and Thrivent Small

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

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

Diversification Opportunities for Mfs Emerging and Thrivent Small

-0.15

Correlation Coefficient

Mfs Emerging  Thrivent Small

Good diversification

The 3 months correlation between MFS and Thrivent is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Emerging Markets 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 Mfs Emerging 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 Mfs Emerging Markets 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 Mfs Emerging i.e., Mfs Emerging and Thrivent Small go up and down completely randomly.

Pair Corralation between Mfs Emerging and Thrivent Small

Assuming the 90 days horizon Mfs Emerging is expected to generate 20.48 times less return on investment than Thrivent Small. But when comparing it to its historical volatility, Mfs Emerging Markets is 4.53 times less risky than Thrivent Small. It trades about 0.04 of its potential returns per unit of risk. Thrivent Small Cap is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,756  in Thrivent Small Cap on September 4, 2024 and sell it today you would earn a total of  221.00  from holding Thrivent Small Cap or generate 12.59% return on investment over 90 days.

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

Mfs Emerging Markets  vs.  Thrivent Small Cap

Mfs Emerging Markets

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Emerging Markets are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mfs Emerging 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

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Thrivent Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mfs Emerging and Thrivent Small

The main advantage of trading using opposite Mfs Emerging and Thrivent Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Emerging 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 Mfs Emerging Markets 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.