Correlation Between California High-yield and Thornburg International
Can any of the company-specific risk be diversified away by investing in both California High-yield and Thornburg International 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 California High-yield and Thornburg International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and Thornburg International Value, you can compare the effects of market volatilities on California High-yield and Thornburg International 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 California High-yield with a short position of Thornburg International. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High-yield and Thornburg International.
Diversification Opportunities for California High-yield and Thornburg International
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between California and Thornburg is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and Thornburg International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg International and California High-yield 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 California High Yield Municipal are associated (or correlated) with Thornburg International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg International has no effect on the direction of California High-yield i.e., California High-yield and Thornburg International go up and down completely randomly.
Pair Corralation between California High-yield and Thornburg International
Assuming the 90 days horizon California High-yield is expected to generate 2.06 times less return on investment than Thornburg International. But when comparing it to its historical volatility, California High Yield Municipal is 2.67 times less risky than Thornburg International. It trades about 0.07 of its potential returns per unit of risk. Thornburg International Value is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,113 in Thornburg International Value on September 3, 2024 and sell it today you would earn a total of 459.00 from holding Thornburg International Value or generate 21.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California High Yield Municipa vs. Thornburg International Value
Performance |
| Timeline |
| California High Yield |
| Thornburg International |
California High-yield and Thornburg International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High-yield and Thornburg International
The main advantage of trading using opposite California High-yield and Thornburg International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High-yield position performs unexpectedly, Thornburg International 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 International will offset losses from the drop in Thornburg International's long position.| California High-yield vs. Volumetric Fund Volumetric | California High-yield vs. Abr 7525 Volatility | California High-yield vs. Qs Large Cap | California High-yield vs. Ab Value Fund |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |