Correlation Between Thrivent Natural and Pimco Diversified

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

Diversification Opportunities for Thrivent Natural and Pimco Diversified

0.09

Correlation Coefficient

Thrivent Natural  Pimco Diversified

Significant diversification

The 3 months correlation between Thrivent and Pimco is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Pimco Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Diversified Income 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 Pimco Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Diversified Income has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Pimco Diversified go up and down completely randomly.

Pair Corralation between Thrivent Natural and Pimco Diversified

Assuming the 90 days horizon Thrivent Natural Resources is expected to generate 0.25 times more return on investment than Pimco Diversified. However, Thrivent Natural Resources is 4.06 times less risky than Pimco Diversified. It trades about 0.38 of its potential returns per unit of risk. Pimco Diversified Income is currently generating about 0.06 per unit of risk. If you would invest  982.00  in Thrivent Natural Resources on October 24, 2024 and sell it today you would earn a total of  14.00  from holding Thrivent Natural Resources or generate 1.43% return on investment over 90 days.

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

Thrivent Natural Resources  vs.  Pimco Diversified Income

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.

Pimco Diversified Income

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Diversified Income are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pimco Diversified 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 Pimco Diversified

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

The idea behind Thrivent Natural Resources and Pimco Diversified Income 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.