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 York, 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
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thornburg and Thornburg is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg International Value and Thornburg New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg New York 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 York 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 under-perform the Thornburg New. In addition to that, Thornburg International is 6.31 times more volatile than Thornburg New York. It trades about -0.03 of its total potential returns per unit of risk. Thornburg New York is currently generating about 0.15 per unit of volatility. If you would invest 1,173 in Thornburg New York on August 29, 2024 and sell it today you would earn a total of 33.00 from holding Thornburg New York or generate 2.81% 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 York
Performance |
| Timeline |
| Thornburg International |
| Thornburg New York |
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 York 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. Goldman Sachs Technology | Thornburg New vs. Mfs Technology Fund | Thornburg New vs. Fidelity Advisor Technology | Thornburg New vs. Invesco Technology Fund |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |