Correlation Between Europac Gold and Thornburg Investment
Can any of the company-specific risk be diversified away by investing in both Europac 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 Europac 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 Europac Gold Fund and Thornburg Investment Income, you can compare the effects of market volatilities on Europac 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 Europac Gold with a short position of Thornburg Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Thornburg Investment.
Diversification Opportunities for Europac Gold and Thornburg Investment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Europac and Thornburg is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Europac 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 Europac 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 Europac 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 Europac Gold i.e., Europac Gold and Thornburg Investment go up and down completely randomly.
Pair Corralation between Europac Gold and Thornburg Investment
Assuming the 90 days horizon Europac Gold is expected to generate 1.17 times less return on investment than Thornburg Investment. In addition to that, Europac Gold is 3.31 times more volatile than Thornburg Investment Income. It trades about 0.03 of its total potential returns per unit of risk. Thornburg Investment Income is currently generating about 0.12 per unit of volatility. If you would invest 2,115 in Thornburg Investment Income on September 12, 2024 and sell it today you would earn a total of 481.00 from holding Thornburg Investment Income or generate 22.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Europac Gold Fund vs. Thornburg Investment Income
Performance |
| Timeline |
| Europac Gold |
| Thornburg Investment |
Europac Gold and Thornburg Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europac Gold and Thornburg Investment
The main advantage of trading using opposite Europac Gold and Thornburg Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac 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.| Europac Gold vs. Europac International Value | Europac Gold vs. Europac International Dividend | Europac Gold vs. Ep Emerging Markets | Europac Gold vs. Europac International Bond |
| Thornburg Investment vs. Europac Gold Fund | Thornburg Investment vs. Global Gold Fund | Thornburg Investment vs. Gabelli Gold Fund | Thornburg Investment vs. Gold And Precious |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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