Correlation Between Absolute Convertible and Thornburg Investment
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible 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 Absolute Convertible and Thornburg Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Thornburg Investment Trust, you can compare the effects of market volatilities on Absolute Convertible 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 Absolute Convertible with a short position of Thornburg Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Thornburg Investment.
Diversification Opportunities for Absolute Convertible and Thornburg Investment
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Absolute and Thornburg is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Thornburg Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Investment and Absolute Convertible 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 Absolute Convertible Arbitrage 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 Absolute Convertible i.e., Absolute Convertible and Thornburg Investment go up and down completely randomly.
Pair Corralation between Absolute Convertible and Thornburg Investment
Assuming the 90 days horizon Absolute Convertible is expected to generate 1.7 times less return on investment than Thornburg Investment. But when comparing it to its historical volatility, Absolute Convertible Arbitrage is 14.13 times less risky than Thornburg Investment. It trades about 0.38 of its potential returns per unit of risk. Thornburg Investment Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,020 in Thornburg Investment Trust on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Thornburg Investment Trust or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Thornburg Investment Trust
Performance |
| Timeline |
| Absolute Convertible |
| Thornburg Investment |
Absolute Convertible and Thornburg Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Thornburg Investment
The main advantage of trading using opposite Absolute Convertible and Thornburg Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible 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.| Absolute Convertible vs. Advent Claymore Convertible | Absolute Convertible vs. Fidelity Sai Convertible | Absolute Convertible vs. Virtus Convertible | Absolute Convertible vs. Putnam Convertible Incm Gwth |
| Thornburg Investment vs. Thornburg Value Fund | Thornburg Investment vs. Thornburg Value Fund | Thornburg Investment vs. Thornburg International Value | Thornburg Investment vs. Thornburg International Value |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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