Correlation Between Causeway Emerging and Thornburg International
Can any of the company-specific risk be diversified away by investing in both Causeway Emerging 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 Causeway Emerging and Thornburg International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Causeway Emerging Markets and Thornburg International Growth, you can compare the effects of market volatilities on Causeway Emerging 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 Causeway Emerging with a short position of Thornburg International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Causeway Emerging and Thornburg International.
Diversification Opportunities for Causeway Emerging and Thornburg International
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Causeway and Thornburg is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Causeway Emerging Markets and Thornburg International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg International and Causeway Emerging 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 Causeway Emerging Markets 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 Causeway Emerging i.e., Causeway Emerging and Thornburg International go up and down completely randomly.
Pair Corralation between Causeway Emerging and Thornburg International
Assuming the 90 days horizon Causeway Emerging Markets is expected to generate 0.32 times more return on investment than Thornburg International. However, Causeway Emerging Markets is 3.1 times less risky than Thornburg International. It trades about 0.1 of its potential returns per unit of risk. Thornburg International Growth is currently generating about -0.2 per unit of risk. If you would invest 1,157 in Causeway Emerging Markets on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Causeway Emerging Markets or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Causeway Emerging Markets vs. Thornburg International Growth
Performance |
| Timeline |
| Causeway Emerging Markets |
| Thornburg International |
Causeway Emerging and Thornburg International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Causeway Emerging and Thornburg International
The main advantage of trading using opposite Causeway Emerging and Thornburg International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Causeway Emerging 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.| Causeway Emerging vs. T Rowe Price | Causeway Emerging vs. California High Yield Municipal | Causeway Emerging vs. Gamco Global Telecommunications | Causeway Emerging vs. T Rowe Price |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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