Correlation Between Thrivent Large and Fidelity Flex

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

Diversification Opportunities for Thrivent Large and Fidelity Flex

0.8

Correlation Coefficient

Thrivent Large  Fidelity Flex

Very poor diversification

The 3 months correlation between Thrivent and Fidelity is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Large Cap and Fidelity Flex Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Freedom 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 Fidelity Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Freedom has no effect on the direction of Thrivent Large i.e., Thrivent Large and Fidelity Flex go up and down completely randomly.

Pair Corralation between Thrivent Large and Fidelity Flex

Assuming the 90 days horizon Thrivent Large Cap is expected to generate 2.77 times more return on investment than Fidelity Flex. However, Thrivent Large is 2.77 times more volatile than Fidelity Flex Freedom. It trades about 0.17 of its potential returns per unit of risk. Fidelity Flex Freedom is currently generating about 0.16 per unit of risk. If you would invest  1,344  in Thrivent Large Cap on January 18, 2024 and sell it today you would earn a total of  286.00  from holding Thrivent Large Cap or generate 21.28% return on investment over 90 days.

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

Thrivent Large Cap  vs.  Fidelity Flex Freedom

Thrivent Large Cap

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Large Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Thrivent Large may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Fidelity Flex Freedom

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Flex Freedom are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Flex 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 Large and Fidelity Flex

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

The idea behind Thrivent Large Cap and Fidelity Flex Freedom 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.