Correlation Between Thrivent Small and Delaware Limited-term

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

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

Diversification Opportunities for Thrivent Small and Delaware Limited-term

-0.58

Correlation Coefficient

Thrivent Small  Delaware Limited-term

Excellent diversification

The 3 months correlation between Thrivent and Delaware is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Small Cap and Delaware Limited Term Diversif in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Limited Term and Thrivent Small 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 Small Cap are associated (or correlated) with Delaware Limited-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Limited Term has no effect on the direction of Thrivent Small i.e., Thrivent Small and Delaware Limited-term go up and down completely randomly.

Pair Corralation between Thrivent Small and Delaware Limited-term

Assuming the 90 days horizon Thrivent Small Cap is expected to under-perform the Delaware Limited-term. In addition to that, Thrivent Small is 8.13 times more volatile than Delaware Limited Term Diversified. It trades about -0.15 of its total potential returns per unit of risk. Delaware Limited Term Diversified is currently generating about 0.21 per unit of volatility. If you would invest  777.00  in Delaware Limited Term Diversified on December 22, 2024 and sell it today you would earn a total of  12.00  from holding Delaware Limited Term Diversified or generate 1.54% return on investment over 90 days.

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

Thrivent Small Cap  vs.  Delaware Limited Term Diversif

Thrivent Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thrivent Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Delaware Limited Term

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Limited Term Diversified are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Delaware Limited-term 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 Small and Delaware Limited-term

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

The idea behind Thrivent Small Cap and Delaware Limited Term Diversified 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.

Check out your portfolio center.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.