Correlation Between Thrivent Moderately and Aqr Small

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

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

Diversification Opportunities for Thrivent Moderately and Aqr Small

0.98

Correlation Coefficient

Thrivent Moderately  Aqr Small

Almost no diversification

The 3 months correlation between Thrivent and Aqr is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Moderately Servative and Aqr Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Small Cap and Thrivent Moderately 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 Moderately Servative are associated (or correlated) with Aqr Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Small Cap has no effect on the direction of Thrivent Moderately i.e., Thrivent Moderately and Aqr Small go up and down completely randomly.

Pair Corralation between Thrivent Moderately and Aqr Small

Assuming the 90 days horizon Thrivent Moderately is expected to generate 1.87 times less return on investment than Aqr Small. But when comparing it to its historical volatility, Thrivent Moderately Servative is 3.13 times less risky than Aqr Small. It trades about 0.26 of its potential returns per unit of risk. Aqr Small Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,622  in Aqr Small Cap on May 2, 2025 and sell it today you would earn a total of  172.00  from holding Aqr Small Cap or generate 10.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Thrivent Moderately Servative  vs.  Aqr Small Cap

Thrivent Moderately

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Moderately Servative are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thrivent Moderately is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aqr Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Small Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Small may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Thrivent Moderately and Aqr Small

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

The idea behind Thrivent Moderately Servative and Aqr Small Cap 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.