Correlation Between Thrivent Moderately and Great West

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

Diversification Opportunities for Thrivent Moderately and Great West

0.13

Correlation Coefficient

Thrivent Moderately  Great West

Average diversification

The 3 months correlation between Thrivent and Great is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Moderately Aggressive and Great West Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Goldman 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Goldman has no effect on the direction of Thrivent Moderately i.e., Thrivent Moderately and Great West go up and down completely randomly.

Pair Corralation between Thrivent Moderately and Great West

Assuming the 90 days horizon Thrivent Moderately Aggressive is expected to under-perform the Great West. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent Moderately Aggressive is 2.8 times less risky than Great West. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Great West Goldman Sachs is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  855.00  in Great West Goldman Sachs on October 22, 2024 and sell it today you would earn a total of  0.00  from holding Great West Goldman Sachs or generate 0.0% return on investment over 90 days.

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

Thrivent Moderately Aggressive  vs.  Great West Goldman Sachs

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.

Great West Goldman

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Goldman Sachs are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Great West 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 Great West

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

The idea behind Thrivent Moderately Aggressive and Great West Goldman Sachs 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.