Correlation Between GM and Thornburg Strategic
Can any of the company-specific risk be diversified away by investing in both GM and Thornburg Strategic 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 GM and Thornburg Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Thornburg Strategic Income, you can compare the effects of market volatilities on GM and Thornburg Strategic 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 GM with a short position of Thornburg Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Thornburg Strategic.
Diversification Opportunities for GM and Thornburg Strategic
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Thornburg is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Thornburg Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Strategic and GM 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 General Motors are associated (or correlated) with Thornburg Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Strategic has no effect on the direction of GM i.e., GM and Thornburg Strategic go up and down completely randomly.
Pair Corralation between GM and Thornburg Strategic
Allowing for the 90-day total investment horizon General Motors is expected to generate 12.61 times more return on investment than Thornburg Strategic. However, GM is 12.61 times more volatile than Thornburg Strategic Income. It trades about 0.14 of its potential returns per unit of risk. Thornburg Strategic Income is currently generating about 0.12 per unit of risk. If you would invest 5,180 in General Motors on September 3, 2024 and sell it today you would earn a total of 379.00 from holding General Motors or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Thornburg Strategic Income
Performance |
| Timeline |
| General Motors |
| Thornburg Strategic |
GM and Thornburg Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Thornburg Strategic
The main advantage of trading using opposite GM and Thornburg Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Thornburg Strategic 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 Strategic will offset losses from the drop in Thornburg Strategic's long position.The idea behind General Motors and Thornburg Strategic Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Thornburg Strategic vs. Transamerica Financial Life | Thornburg Strategic vs. Davis Financial Fund | Thornburg Strategic vs. Prudential Jennison Financial | Thornburg Strategic vs. Fidelity Advisor Financial |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |