Correlation Between Growth Fund and Thornburg International
Can any of the company-specific risk be diversified away by investing in both Growth Fund 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 Growth Fund and Thornburg International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Thornburg International Value, you can compare the effects of market volatilities on Growth Fund 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 Growth Fund with a short position of Thornburg International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Thornburg International.
Diversification Opportunities for Growth Fund and Thornburg International
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Growth and Thornburg is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Thornburg International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg International and Growth Fund 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 Growth Fund Of 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 Growth Fund i.e., Growth Fund and Thornburg International go up and down completely randomly.
Pair Corralation between Growth Fund and Thornburg International
Assuming the 90 days horizon Growth Fund Of is expected to generate 0.81 times more return on investment than Thornburg International. However, Growth Fund Of is 1.24 times less risky than Thornburg International. It trades about 0.2 of its potential returns per unit of risk. Thornburg International Value is currently generating about -0.32 per unit of risk. If you would invest 7,807 in Growth Fund Of on August 29, 2024 and sell it today you would earn a total of 345.00 from holding Growth Fund Of or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Thornburg International Value
Performance |
| Timeline |
| Growth Fund |
| Thornburg International |
Growth Fund and Thornburg International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Thornburg International
The main advantage of trading using opposite Growth Fund and Thornburg International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund 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.| Growth Fund vs. Europacific Growth Fund | Growth Fund vs. Capital World Growth | Growth Fund vs. American Funds Fundamental | Growth Fund vs. Washington Mutual Investors |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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