Correlation Between Thornburg International and Thornburg New
Can any of the company-specific risk be diversified away by investing in both Thornburg International and Thornburg New 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 Thornburg International and Thornburg New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg International Value and Thornburg New Mexico, you can compare the effects of market volatilities on Thornburg International and Thornburg New 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 Thornburg International with a short position of Thornburg New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg International and Thornburg New.
Diversification Opportunities for Thornburg International and Thornburg New
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thornburg and THORNBURG is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg International Value and Thornburg New Mexico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg New Mexico and Thornburg International 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 Thornburg International Value are associated (or correlated) with Thornburg New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg New Mexico has no effect on the direction of Thornburg International i.e., Thornburg International and Thornburg New go up and down completely randomly.
Pair Corralation between Thornburg International and Thornburg New
Assuming the 90 days horizon Thornburg International Value is expected to generate 5.14 times more return on investment than Thornburg New. However, Thornburg International is 5.14 times more volatile than Thornburg New Mexico. It trades about 0.06 of its potential returns per unit of risk. Thornburg New Mexico is currently generating about 0.06 per unit of risk. If you would invest 2,117 in Thornburg International Value on August 30, 2024 and sell it today you would earn a total of 459.00 from holding Thornburg International Value or generate 21.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg International Value vs. Thornburg New Mexico
Performance |
| Timeline |
| Thornburg International |
| Thornburg New Mexico |
Thornburg International and Thornburg New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg International and Thornburg New
The main advantage of trading using opposite Thornburg International and Thornburg New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg International position performs unexpectedly, Thornburg New 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 New will offset losses from the drop in Thornburg New's long position.The idea behind Thornburg International Value and Thornburg New Mexico 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 New vs. Ambrus Core Bond | Thornburg New vs. Blrc Sgy Mnp | Thornburg New vs. Rbc Ultra Short Fixed | Thornburg New vs. Bbh Intermediate Municipal |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |