Correlation Between Thrivent Natural and Columbia Capital

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

Diversification Opportunities for Thrivent Natural and Columbia Capital

-0.49

Correlation Coefficient

Thrivent Natural  Columbia Capital

Very good diversification

The 3 months correlation between Thrivent and Columbia is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Columbia Capital Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Capital All 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 Columbia Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Capital All has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Columbia Capital go up and down completely randomly.

Pair Corralation between Thrivent Natural and Columbia Capital

Assuming the 90 days horizon Thrivent Natural is expected to generate 1.45 times less return on investment than Columbia Capital. But when comparing it to its historical volatility, Thrivent Natural Resources is 2.26 times less risky than Columbia Capital. It trades about 0.1 of its potential returns per unit of risk. Columbia Capital Allocation is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,004  in Columbia Capital Allocation on October 25, 2024 and sell it today you would earn a total of  192.00  from holding Columbia Capital Allocation or generate 19.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Thrivent Natural Resources  vs.  Columbia Capital Allocation

Thrivent Natural Res

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Natural Resources are ranked lower than 29 (%) 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.

Columbia Capital All

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Capital Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Columbia Capital 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 Columbia Capital

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

The idea behind Thrivent Natural Resources and Columbia Capital Allocation 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .