Correlation Between Thrivent Natural and Short Precious

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

Diversification Opportunities for Thrivent Natural and Short Precious

-0.93

Correlation Coefficient

Thrivent Natural  Short Precious

Pay attention - limited upside

The 3 months correlation between Thrivent and Short is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Natural Resources and Short Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Precious Metals 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 Short Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Precious Metals has no effect on the direction of Thrivent Natural i.e., Thrivent Natural and Short Precious go up and down completely randomly.

Pair Corralation between Thrivent Natural and Short Precious

Assuming the 90 days horizon Thrivent Natural Resources is expected to generate 0.06 times more return on investment than Short Precious. However, Thrivent Natural Resources is 15.77 times less risky than Short Precious. It trades about 0.19 of its potential returns per unit of risk. Short Precious Metals is currently generating about -0.28 per unit of risk. If you would invest  992.00  in Thrivent Natural Resources on December 29, 2024 and sell it today you would earn a total of  13.00  from holding Thrivent Natural Resources or generate 1.31% return on investment over 90 days.

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

Thrivent Natural Resources  vs.  Short Precious Metals

Thrivent Natural Res

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Natural Resources are ranked lower than 15 (%) 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.

Short Precious Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Short Precious Metals has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Thrivent Natural and Short Precious

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

The idea behind Thrivent Natural Resources and Short Precious Metals 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.