Correlation Between American Funds and Thrivent Aggressive

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

By analyzing existing cross correlation between American Funds Growth and Thrivent Aggressive Allocation, you can compare the effects of market volatilities on American Funds and Thrivent Aggressive 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 American Funds with a short position of Thrivent Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Thrivent Aggressive.

Diversification Opportunities for American Funds and Thrivent Aggressive

0.75

Correlation Coefficient

American Funds  Thrivent Aggressive

Poor diversification

The 3 months correlation between American and Thrivent is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Growth and Thrivent Aggressive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Aggressive and American Funds 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 American Funds Growth are associated (or correlated) with Thrivent Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Aggressive has no effect on the direction of American Funds i.e., American Funds and Thrivent Aggressive go up and down completely randomly.

Pair Corralation between American Funds and Thrivent Aggressive

Assuming the 90 days horizon American Funds Growth is expected to generate 1.06 times more return on investment than Thrivent Aggressive. However, American Funds is 1.06 times more volatile than Thrivent Aggressive Allocation. It trades about 0.07 of its potential returns per unit of risk. Thrivent Aggressive Allocation is currently generating about 0.02 per unit of risk. If you would invest  2,324  in American Funds Growth on May 6, 2025 and sell it today you would earn a total of  474.00  from holding American Funds Growth or generate 20.4% return on investment over 90 days.

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

American Funds Growth  vs.  Thrivent Aggressive Allocation

American Funds Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in American Funds Growth are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, American Funds may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Thrivent Aggressive

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Aggressive Allocation are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Thrivent Aggressive may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with American Funds and Thrivent Aggressive

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

The idea behind American Funds Growth and Thrivent Aggressive Allocation 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..