Correlation Between Thrivent Moderately and Baird Small/mid

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

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

Diversification Opportunities for Thrivent Moderately and Baird Small/mid

0.48

Correlation Coefficient

Thrivent Moderately  Baird Small/mid

Very weak diversification

The 3 months correlation between Thrivent and Baird is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Moderately Servative and Baird Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Smallmid Cap and Thrivent Moderately 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 Moderately Servative are associated (or correlated) with Baird Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Smallmid Cap has no effect on the direction of Thrivent Moderately i.e., Thrivent Moderately and Baird Small/mid go up and down completely randomly.

Pair Corralation between Thrivent Moderately and Baird Small/mid

Assuming the 90 days horizon Thrivent Moderately Servative is expected to generate 0.32 times more return on investment than Baird Small/mid. However, Thrivent Moderately Servative is 3.13 times less risky than Baird Small/mid. It trades about -0.01 of its potential returns per unit of risk. Baird Smallmid Cap is currently generating about -0.14 per unit of risk. If you would invest  1,292  in Thrivent Moderately Servative on December 29, 2024 and sell it today you would lose (4.00) from holding Thrivent Moderately Servative or give up 0.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Thrivent Moderately Servative  vs.  Baird Smallmid Cap

Thrivent Moderately

Risk-Adjusted Performance

Very Weak

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

Baird Smallmid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baird Smallmid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Thrivent Moderately and Baird Small/mid

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

The idea behind Thrivent Moderately Servative and Baird Smallmid 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.