Correlation Between Thrivent Natural and Artisan Small

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

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

Diversification Opportunities for Thrivent Natural and Artisan Small

0.28

Correlation Coefficient

Thrivent Natural  Artisan Small

Modest diversification

The 3 months correlation between Thrivent and Artisan is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Artisan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Small Cap and Thrivent Natural 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 Natural Resources are associated (or correlated) with Artisan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Small Cap has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Artisan Small go up and down completely randomly.

Pair Corralation between Thrivent Natural and Artisan Small

Assuming the 90 days horizon Thrivent Natural Resources is expected to generate 0.03 times more return on investment than Artisan Small. However, Thrivent Natural Resources is 32.1 times less risky than Artisan Small. It trades about 0.38 of its potential returns per unit of risk. Artisan Small Cap is currently generating about -0.24 per unit of risk. If you would invest  1,005  in Thrivent Natural Resources on September 28, 2024 and sell it today you would earn a total of  4.00  from holding Thrivent Natural Resources or generate 0.4% return on investment over 90 days.

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

Thrivent Natural Resources  vs.  Artisan Small Cap

Thrivent Natural Res

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Natural Resources are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thrivent Natural is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Artisan Small 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 Natural and Artisan Small

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

The idea behind Thrivent Natural Resources and Artisan Small 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.