Correlation Between Thrivent Large and Pacer Metaurus

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Can any of the company-specific risk be diversified away by investing in both Thrivent Large and Pacer Metaurus 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 Large and Pacer Metaurus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent Large Cap and Pacer Metaurus US, you can compare the effects of market volatilities on Thrivent Large and Pacer Metaurus 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 Large with a short position of Pacer Metaurus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Large and Pacer Metaurus.

Diversification Opportunities for Thrivent Large and Pacer Metaurus

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Thrivent and Pacer is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Large Cap and Pacer Metaurus US in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Metaurus US and Thrivent Large 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 Large Cap are associated (or correlated) with Pacer Metaurus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Metaurus US has no effect on the direction of Thrivent Large i.e., Thrivent Large and Pacer Metaurus go up and down completely randomly.

Pair Corralation between Thrivent Large and Pacer Metaurus

Assuming the 90 days horizon Thrivent Large Cap is expected to under-perform the Pacer Metaurus. In addition to that, Thrivent Large is 1.4 times more volatile than Pacer Metaurus US. It trades about -0.01 of its total potential returns per unit of risk. Pacer Metaurus US is currently generating about -0.01 per unit of volatility. If you would invest  3,823  in Pacer Metaurus US on August 30, 2022 and sell it today you would lose (239.00)  from holding Pacer Metaurus US or give up 6.25% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy70.22%
ValuesDaily Returns

Thrivent Large Cap  vs.  Pacer Metaurus US

 Performance (%) 
       Timeline  
Thrivent Large Cap 
Thrivent Performance
0 of 100
Over the last 90 days Thrivent Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Thrivent Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thrivent Price Channel

Pacer Metaurus US 
Pacer Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Metaurus US are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady basic indicators, Pacer Metaurus is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pacer Price Channel

Thrivent Large and Pacer Metaurus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Thrivent Large and Pacer Metaurus

The main advantage of trading using opposite Thrivent Large and Pacer Metaurus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Large position performs unexpectedly, Pacer Metaurus 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 Pacer Metaurus will offset losses from the drop in Pacer Metaurus' long position.
Thrivent Large vs. The Growth Fund
The idea behind Thrivent Large Cap and Pacer Metaurus US 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.
Pacer Metaurus vs. Ishares Environmental Infrastructure
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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