Correlation Between Transamerica Financial and Thornburg Strategic
Can any of the company-specific risk be diversified away by investing in both Transamerica Financial 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 Transamerica Financial and Thornburg Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Financial Life and Thornburg Strategic Income, you can compare the effects of market volatilities on Transamerica Financial 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 Transamerica Financial with a short position of Thornburg Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Financial and Thornburg Strategic.
Diversification Opportunities for Transamerica Financial and Thornburg Strategic
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transamerica and Thornburg is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Financial Life and Thornburg Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Strategic and Transamerica Financial 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 Transamerica Financial Life 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 Transamerica Financial i.e., Transamerica Financial and Thornburg Strategic go up and down completely randomly.
Pair Corralation between Transamerica Financial and Thornburg Strategic
Assuming the 90 days horizon Transamerica Financial Life is expected to generate 3.63 times more return on investment than Thornburg Strategic. However, Transamerica Financial is 3.63 times more volatile than Thornburg Strategic Income. It trades about 0.05 of its potential returns per unit of risk. Thornburg Strategic Income is currently generating about 0.1 per unit of risk. If you would invest 1,009 in Transamerica Financial Life on September 3, 2024 and sell it today you would earn a total of 238.00 from holding Transamerica Financial Life or generate 23.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Financial Life vs. Thornburg Strategic Income
Performance |
| Timeline |
| Transamerica Financial |
| Thornburg Strategic |
Transamerica Financial and Thornburg Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Financial and Thornburg Strategic
The main advantage of trading using opposite Transamerica Financial and Thornburg Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Financial 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.| Transamerica Financial vs. Aig Government Money | Transamerica Financial vs. John Hancock Money | Transamerica Financial vs. First American Funds | Transamerica Financial vs. Matson Money Equity |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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