Correlation Between Henderson Global and Thornburg Investment
Can any of the company-specific risk be diversified away by investing in both Henderson Global 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 Henderson Global and Thornburg Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson Global Equity and Thornburg Investment Income, you can compare the effects of market volatilities on Henderson Global 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 Henderson Global with a short position of Thornburg Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson Global and Thornburg Investment.
Diversification Opportunities for Henderson Global and Thornburg Investment
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Henderson and Thornburg is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Global Equity and Thornburg Investment Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Investment and Henderson Global 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 Henderson Global Equity 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 Henderson Global i.e., Henderson Global and Thornburg Investment go up and down completely randomly.
Pair Corralation between Henderson Global and Thornburg Investment
Assuming the 90 days horizon Henderson Global Equity is expected to generate 1.28 times more return on investment than Thornburg Investment. However, Henderson Global is 1.28 times more volatile than Thornburg Investment Income. It trades about -0.01 of its potential returns per unit of risk. Thornburg Investment Income is currently generating about -0.06 per unit of risk. If you would invest 624.00 in Henderson Global Equity on September 12, 2024 and sell it today you would lose (2.00) from holding Henderson Global Equity or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henderson Global Equity vs. Thornburg Investment Income
Performance |
| Timeline |
| Henderson Global Equity |
| Thornburg Investment |
Henderson Global and Thornburg Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson Global and Thornburg Investment
The main advantage of trading using opposite Henderson Global and Thornburg Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson Global 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.| Henderson Global vs. Thornburg Investment Income | Henderson Global vs. Federated Strategic Value | Henderson Global vs. Franklin Income Fund | Henderson Global vs. Blackrock Incm Ptf |
| Thornburg Investment vs. Franklin Income Fund | Thornburg Investment vs. First Eagle Global | Thornburg Investment vs. Blackrock Incm Ptf | Thornburg Investment vs. Oppenheimer International 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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