Correlation Between Strengthening Dollar and Thornburg Strategic
Can any of the company-specific risk be diversified away by investing in both Strengthening Dollar 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 Strengthening Dollar and Thornburg Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strengthening Dollar 2x and Thornburg Strategic Municipal, you can compare the effects of market volatilities on Strengthening Dollar 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 Strengthening Dollar with a short position of Thornburg Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strengthening Dollar and Thornburg Strategic.
Diversification Opportunities for Strengthening Dollar and Thornburg Strategic
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Strengthening and THORNBURG is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Strengthening Dollar 2x and Thornburg Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Strategic and Strengthening Dollar 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 Strengthening Dollar 2x 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 Strengthening Dollar i.e., Strengthening Dollar and Thornburg Strategic go up and down completely randomly.
Pair Corralation between Strengthening Dollar and Thornburg Strategic
Assuming the 90 days horizon Strengthening Dollar 2x is expected to generate 4.01 times more return on investment than Thornburg Strategic. However, Strengthening Dollar is 4.01 times more volatile than Thornburg Strategic Municipal. It trades about 0.2 of its potential returns per unit of risk. Thornburg Strategic Municipal is currently generating about 0.0 per unit of risk. If you would invest 6,726 in Strengthening Dollar 2x on October 23, 2024 and sell it today you would earn a total of 180.00 from holding Strengthening Dollar 2x or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strengthening Dollar 2x vs. Thornburg Strategic Municipal
Performance |
| Timeline |
| Strengthening Dollar |
| Thornburg Strategic |
Strengthening Dollar and Thornburg Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strengthening Dollar and Thornburg Strategic
The main advantage of trading using opposite Strengthening Dollar and Thornburg Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strengthening Dollar 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.| Strengthening Dollar vs. Thornburg Strategic Municipal | Strengthening Dollar vs. Morningstar Municipal Bond | Strengthening Dollar vs. Blrc Sgy Mnp | Strengthening Dollar vs. Transamerica Intermediate Muni |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |