Correlation Between Thornburg International and Thornburg Better
Can any of the company-specific risk be diversified away by investing in both Thornburg International and Thornburg Better 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 Better 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 Better World, you can compare the effects of market volatilities on Thornburg International and Thornburg Better 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 Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg International and Thornburg Better.
Diversification Opportunities for Thornburg International and Thornburg Better
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thornburg and Thornburg is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg International Value and Thornburg Better World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Better World 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 Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Better World has no effect on the direction of Thornburg International i.e., Thornburg International and Thornburg Better go up and down completely randomly.
Pair Corralation between Thornburg International and Thornburg Better
Assuming the 90 days horizon Thornburg International Value is expected to under-perform the Thornburg Better. In addition to that, Thornburg International is 1.13 times more volatile than Thornburg Better World. It trades about -0.03 of its total potential returns per unit of risk. Thornburg Better World is currently generating about 0.03 per unit of volatility. If you would invest 1,870 in Thornburg Better World on September 1, 2024 and sell it today you would earn a total of 43.00 from holding Thornburg Better World or generate 2.3% 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. Thornburg Better World
Performance |
| Timeline |
| Thornburg International |
| Thornburg Better World |
Thornburg International and Thornburg Better Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg International and Thornburg Better
The main advantage of trading using opposite Thornburg International and Thornburg Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg International position performs unexpectedly, Thornburg Better 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 Better will offset losses from the drop in Thornburg Better's long position.| Thornburg International vs. Thornburg E Growth | Thornburg International vs. Mainstay Large Cap | Thornburg International vs. Allianzgi Nfj Small Cap | Thornburg International vs. Columbia Mid Cap |
| Thornburg Better vs. Calvert Emerging Markets | Thornburg Better vs. Shelton Green Alpha | Thornburg Better vs. Tiaa Cref Green Bond | Thornburg Better vs. Portfolio 21 Global |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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