Correlation Between Thrivent Large and Global Technology

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

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

Diversification Opportunities for Thrivent Large and Global Technology

0.99

Correlation Coefficient

Thrivent Large  Global Technology

No risk reduction

The 3 months correlation between Thrivent and GLOBAL is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Large Cap and Global Technology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Technology and Thrivent Large 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 Large Cap are associated (or correlated) with Global Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Technology has no effect on the direction of Thrivent Large i.e., Thrivent Large and Global Technology go up and down completely randomly.

Pair Corralation between Thrivent Large and Global Technology

Assuming the 90 days horizon Thrivent Large Cap is expected to under-perform the Global Technology. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent Large Cap is 1.17 times less risky than Global Technology. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Global Technology Portfolio is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  2,129  in Global Technology Portfolio on December 30, 2024 and sell it today you would lose (218.00) from holding Global Technology Portfolio or give up 10.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Thrivent Large Cap  vs.  Global Technology Portfolio

Thrivent Large Cap

Risk-Adjusted Performance

Very Weak

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

Global Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Technology Portfolio 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 Large and Global Technology

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

The idea behind Thrivent Large Cap and Global Technology Portfolio 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 Stocks Directory module to find actively traded stocks across global markets.