Correlation Between Moderate Balanced and Thrivent Money

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

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

Diversification Opportunities for Moderate Balanced and Thrivent Money

0.0

Correlation Coefficient

Moderate Balanced  Thrivent Money

Pay attention - limited upside

The 3 months correlation between MODERATE and Thrivent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Balanced Allocation and Thrivent Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Money Market and Moderate Balanced 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 Moderate Balanced Allocation are associated (or correlated) with Thrivent Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Money Market has no effect on the direction of Moderate Balanced i.e., Moderate Balanced and Thrivent Money go up and down completely randomly.

Pair Corralation between Moderate Balanced and Thrivent Money

Assuming the 90 days horizon Moderate Balanced is expected to generate 117.52 times less return on investment than Thrivent Money. But when comparing it to its historical volatility, Moderate Balanced Allocation is 87.13 times less risky than Thrivent Money. It trades about 0.07 of its potential returns per unit of risk. Thrivent Money Market is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  405.00  in Thrivent Money Market on October 25, 2024 and sell it today you would lose (305.00) from holding Thrivent Money Market or give up 75.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	53.14%
Values	Daily Returns

Moderate Balanced Allocation  vs.  Thrivent Money Market

Moderate Balanced

Risk-Adjusted Performance

3 of 100

Weak

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

Thrivent Money Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thrivent Money Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Thrivent Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Moderate Balanced and Thrivent Money

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

The idea behind Moderate Balanced Allocation and Thrivent Money Market 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.