Correlation Between Great-west Goldman and Thrivent Government

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

By analyzing existing cross correlation between Great West Goldman Sachs and Thrivent Government Bond, you can compare the effects of market volatilities on Great-west Goldman and Thrivent 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 Great-west Goldman with a short position of Thrivent Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Goldman and Thrivent Government.

Diversification Opportunities for Great-west Goldman and Thrivent Government

0.06

Correlation Coefficient

Great-west Goldman  Thrivent Government

Significant diversification

The 3 months correlation between Great-west and Thrivent is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Great West Goldman Sachs and Thrivent Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Government Bond and Great-west Goldman 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 Great West Goldman Sachs are associated (or correlated) with Thrivent Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Government Bond has no effect on the direction of Great-west Goldman i.e., Great-west Goldman and Thrivent Government go up and down completely randomly.

Pair Corralation between Great-west Goldman and Thrivent Government

Assuming the 90 days horizon Great West Goldman Sachs is expected to under-perform the Thrivent Government. In addition to that, Great-west Goldman is 8.9 times more volatile than Thrivent Government Bond. It trades about -0.04 of its total potential returns per unit of risk. Thrivent Government Bond is currently generating about 0.03 per unit of volatility. If you would invest  877.00  in Thrivent Government Bond on November 30, 2024 and sell it today you would earn a total of  4.00  from holding Thrivent Government Bond or generate 0.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Great West Goldman Sachs  vs.  Thrivent Government Bond

Great West Goldman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Great West Goldman Sachs has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking indicators, Great-west Goldman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thrivent Government Bond

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Government Bond are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Thrivent 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 Great-west Goldman and Thrivent Government

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

The idea behind Great West Goldman Sachs and Thrivent Government Bond 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..