Correlation Between Thrivent Large and Nuveen New

Can any of the company-specific risk be diversified away by investing in both Thrivent Large and Nuveen New 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 Nuveen New 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 Nuveen New Jersey, you can compare the effects of market volatilities on Thrivent Large and Nuveen New 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 Nuveen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Large and Nuveen New.

Diversification Opportunities for Thrivent Large and Nuveen New

0.81

Correlation Coefficient

Thrivent Large  Nuveen New

Very poor diversification

The 3 months correlation between Thrivent and Nuveen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Large Cap and Nuveen New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New Jersey 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 Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New Jersey has no effect on the direction of Thrivent Large i.e., Thrivent Large and Nuveen New go up and down completely randomly.

Pair Corralation between Thrivent Large and Nuveen New

Assuming the 90 days horizon Thrivent Large Cap is expected to under-perform the Nuveen New. In addition to that, Thrivent Large is 2.44 times more volatile than Nuveen New Jersey. It trades about -0.15 of its total potential returns per unit of risk. Nuveen New Jersey is currently generating about 0.08 per unit of volatility. If you would invest  1,317  in Nuveen New Jersey on November 28, 2024 and sell it today you would earn a total of  8.00  from holding Nuveen New Jersey or generate 0.61% return on investment over 90 days.

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

Thrivent Large Cap  vs.  Nuveen New Jersey

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.

Nuveen New Jersey

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Thrivent Large and Nuveen New

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

The idea behind Thrivent Large Cap and Nuveen New Jersey 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.