Correlation Between Thrivent Moderate and Thrivent Large

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

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

Diversification Opportunities for Thrivent Moderate and Thrivent Large

0.94

Correlation Coefficient

Thrivent Moderate  Thrivent Large

Almost no diversification

The 3 months correlation between Thrivent and Thrivent is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Moderate Allocation and Thrivent Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Large Cap and Thrivent Moderate 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 Moderate Allocation are associated (or correlated) with Thrivent Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Large Cap has no effect on the direction of Thrivent Moderate i.e., Thrivent Moderate and Thrivent Large go up and down completely randomly.

Pair Corralation between Thrivent Moderate and Thrivent Large

Assuming the 90 days horizon Thrivent Moderate Allocation is expected to under-perform the Thrivent Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent Moderate Allocation is 1.43 times less risky than Thrivent Large. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Thrivent Large Cap is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,698  in Thrivent Large Cap on December 30, 2024 and sell it today you would lose (34.00) from holding Thrivent Large Cap or give up 1.26% of portfolio value over 90 days.

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

Thrivent Moderate Allocation  vs.  Thrivent Large Cap

Thrivent Moderate

Risk-Adjusted Performance

Very Weak

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

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 fairly strong technical and fundamental indicators, Thrivent Large 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 Moderate and Thrivent Large

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

The idea behind Thrivent Moderate Allocation and Thrivent Large 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.