Correlation Between Global Gold and Thornburg Investment
Can any of the company-specific risk be diversified away by investing in both Global Gold and Thornburg Investment 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 Global Gold and Thornburg Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Thornburg Investment Income, you can compare the effects of market volatilities on Global Gold and Thornburg Investment 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 Global Gold with a short position of Thornburg Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Thornburg Investment.
Diversification Opportunities for Global Gold and Thornburg Investment
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Thornburg is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Thornburg Investment Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Investment and Global Gold 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 Global Gold Fund are associated (or correlated) with Thornburg Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Investment has no effect on the direction of Global Gold i.e., Global Gold and Thornburg Investment go up and down completely randomly.
Pair Corralation between Global Gold and Thornburg Investment
Assuming the 90 days horizon Global Gold Fund is expected to generate 2.06 times more return on investment than Thornburg Investment. However, Global Gold is 2.06 times more volatile than Thornburg Investment Income. It trades about 0.28 of its potential returns per unit of risk. Thornburg Investment Income is currently generating about 0.48 per unit of risk. If you would invest 1,184 in Global Gold Fund on October 21, 2024 and sell it today you would earn a total of 83.00 from holding Global Gold Fund or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Thornburg Investment Income
Performance |
| Timeline |
| Global Gold Fund |
| Thornburg Investment |
Global Gold and Thornburg Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Thornburg Investment
The main advantage of trading using opposite Global Gold and Thornburg Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Thornburg Investment 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 Thornburg Investment will offset losses from the drop in Thornburg Investment's long position.| Global Gold vs. Catalystsmh High Income | Global Gold vs. Siit High Yield | Global Gold vs. Ab High Income | Global Gold vs. Artisan High Income |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |