Correlation Between Growth Fund and Thornburg Core
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Thornburg Core 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 Core 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 E Growth, you can compare the effects of market volatilities on Growth Fund and Thornburg Core 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 Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Thornburg Core.
Diversification Opportunities for Growth Fund and Thornburg Core
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Growth and Thornburg is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Thornburg E Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg E Growth 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 Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg E Growth has no effect on the direction of Growth Fund i.e., Growth Fund and Thornburg Core go up and down completely randomly.
Pair Corralation between Growth Fund and Thornburg Core
Assuming the 90 days horizon Growth Fund is expected to generate 1.63 times less return on investment than Thornburg Core. But when comparing it to its historical volatility, Growth Fund Of is 1.59 times less risky than Thornburg Core. It trades about 0.18 of its potential returns per unit of risk. Thornburg E Growth is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,051 in Thornburg E Growth on August 25, 2024 and sell it today you would earn a total of 196.00 from holding Thornburg E Growth or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Thornburg E Growth
Performance |
| Timeline |
| Growth Fund |
| Thornburg E Growth |
Growth Fund and Thornburg Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Thornburg Core
The main advantage of trading using opposite Growth Fund and Thornburg Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Thornburg Core 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 Core will offset losses from the drop in Thornburg Core'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 |
| Thornburg Core vs. Thornburg Value Fund | Thornburg Core vs. Thornburg Value Fund | Thornburg Core vs. Thornburg International Value | Thornburg Core vs. Thornburg International Value |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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