Correlation Between First Eagle and Thornburg Investment
Can any of the company-specific risk be diversified away by investing in both First Eagle 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 First Eagle and Thornburg Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Global and Thornburg Investment Income, you can compare the effects of market volatilities on First Eagle 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 First Eagle with a short position of Thornburg Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Thornburg Investment.
Diversification Opportunities for First Eagle and Thornburg Investment
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Thornburg is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Global and Thornburg Investment Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Investment and First Eagle 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 First Eagle Global 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 First Eagle i.e., First Eagle and Thornburg Investment go up and down completely randomly.
Pair Corralation between First Eagle and Thornburg Investment
Assuming the 90 days horizon First Eagle is expected to generate 1.09 times less return on investment than Thornburg Investment. In addition to that, First Eagle is 1.03 times more volatile than Thornburg Investment Income. It trades about 0.08 of its total potential returns per unit of risk. Thornburg Investment Income is currently generating about 0.09 per unit of volatility. If you would invest 2,006 in Thornburg Investment Income on September 3, 2024 and sell it today you would earn a total of 561.00 from holding Thornburg Investment Income or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Global vs. Thornburg Investment Income
Performance |
| Timeline |
| First Eagle Global |
| Thornburg Investment |
First Eagle and Thornburg Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Thornburg Investment
The main advantage of trading using opposite First Eagle and Thornburg Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle 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.| First Eagle vs. Blackrock Gbl Alloc | First Eagle vs. Ivy Asset Strategy | First Eagle vs. Fpa Crescent Fund | First Eagle vs. Templeton Global Bond |
| Thornburg Investment vs. Blackrock Gbl Alloc | Thornburg Investment vs. Ivy Asset Strategy | Thornburg Investment vs. Fpa Crescent Fund | Thornburg Investment vs. Templeton Global Bond |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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