Correlation Between Thornburg International and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Thornburg International and Vanguard Total 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 Vanguard Total 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 Vanguard Total International, you can compare the effects of market volatilities on Thornburg International and Vanguard Total 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 Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg International and Vanguard Total.
Diversification Opportunities for Thornburg International and Vanguard Total
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thornburg and Vanguard is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg International Value and Vanguard Total International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Inter 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 Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Inter has no effect on the direction of Thornburg International i.e., Thornburg International and Vanguard Total go up and down completely randomly.
Pair Corralation between Thornburg International and Vanguard Total
Assuming the 90 days horizon Thornburg International Value is expected to under-perform the Vanguard Total. In addition to that, Thornburg International is 1.1 times more volatile than Vanguard Total International. It trades about -0.03 of its total potential returns per unit of risk. Vanguard Total International is currently generating about 0.02 per unit of volatility. If you would invest 1,953 in Vanguard Total International on September 1, 2024 and sell it today you would earn a total of 25.00 from holding Vanguard Total International or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg International Value vs. Vanguard Total International
Performance |
| Timeline |
| Thornburg International |
| Vanguard Total Inter |
Thornburg International and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg International and Vanguard Total
The main advantage of trading using opposite Thornburg International and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg International position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.| Thornburg International vs. Growth Fund Of | Thornburg International vs. Loomis Sayles Strategic | Thornburg International vs. Oppenheimer International Bond | Thornburg International vs. Thornburg E Growth |
| Vanguard Total vs. Ab Impact Municipal | Vanguard Total vs. Oklahoma Municipal Fund | Vanguard Total vs. Nuveen Minnesota Municipal | Vanguard Total vs. T Rowe Price |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |