Correlation Between Thrivent Moderately and Horizon Defined

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

By analyzing existing cross correlation between Thrivent Moderately Aggressive and Horizon Defined Risk, you can compare the effects of market volatilities on Thrivent Moderately and Horizon Defined 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 Horizon Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Moderately and Horizon Defined.

Diversification Opportunities for Thrivent Moderately and Horizon Defined

-0.03

Correlation Coefficient

Thrivent Moderately  Horizon Defined

Good diversification

The 3 months correlation between Thrivent and Horizon is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Moderately Aggressive and Horizon Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Defined Risk 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 Aggressive are associated (or correlated) with Horizon Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Defined Risk has no effect on the direction of Thrivent Moderately i.e., Thrivent Moderately and Horizon Defined go up and down completely randomly.

Pair Corralation between Thrivent Moderately and Horizon Defined

Assuming the 90 days horizon Thrivent Moderately Aggressive is expected to generate 1.22 times more return on investment than Horizon Defined. However, Thrivent Moderately is 1.22 times more volatile than Horizon Defined Risk. It trades about 0.09 of its potential returns per unit of risk. Horizon Defined Risk is currently generating about 0.04 per unit of risk. If you would invest  1,718  in Thrivent Moderately Aggressive on October 22, 2024 and sell it today you would earn a total of  18.00  from holding Thrivent Moderately Aggressive or generate 1.05% return on investment over 90 days.

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

Thrivent Moderately Aggressive  vs.  Horizon Defined Risk

Thrivent Moderately

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thrivent Moderately Aggressive 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.

Horizon Defined Risk

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Defined Risk are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Horizon Defined 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 Moderately and Horizon Defined

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

The idea behind Thrivent Moderately Aggressive and Horizon Defined Risk 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.