Learn Swedish: Analytikern studerar sektorn, och risken är således mindre. - The analyst is studying the sector, and the risk is thus smaller.

Yes, it can! Således is a sentence adverb. Standard main clause word order places the adverb after the first verb, hence risken är således mindre. If you place it immediately after och, it takes the first position in the new clause, which triggers the V2 rule (the verb must come second). The sentence would then be: ...och således är risken mindre. Both are perfectly natural in formal Swedish.

How does således compare to a simpler word like därför?

Således is significantly more formal and academic, translating closely to "thus" or "consequently". While därför is common in everyday conversation, således (along with därmed and följaktligen) is mostly reserved for professional reports, academic texts, or formal news. It fits perfectly here since the sentence is describing an analyst's professional assessment.

Could I use the other lesson words, därmed or följaktligen, instead of således here?

Yes, they are highly interchangeable in this context, though there is a subtle difference in nuance. Därmed translates closer to "thereby" or "by doing so," heavily implying the action of the analyst's study itself directly causes the risk to drop. Således (thus) and följaktligen (consequently) simply state a logical conclusion: because the study is happening, we can conclude the risk is smaller.