Correlation Between Thornburg International and Ab Discovery
Can any of the company-specific risk be diversified away by investing in both Thornburg International and Ab Discovery 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 Ab Discovery 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 Ab Discovery Value, you can compare the effects of market volatilities on Thornburg International and Ab Discovery 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 Ab Discovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg International and Ab Discovery.
Diversification Opportunities for Thornburg International and Ab Discovery
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thornburg and ABYSX is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg International Value and Ab Discovery Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Discovery Value 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 Ab Discovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Discovery Value has no effect on the direction of Thornburg International i.e., Thornburg International and Ab Discovery go up and down completely randomly.
Pair Corralation between Thornburg International and Ab Discovery
Assuming the 90 days horizon Thornburg International Value is expected to under-perform the Ab Discovery. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thornburg International Value is 1.12 times less risky than Ab Discovery. The mutual fund trades about -0.3 of its potential returns per unit of risk. The Ab Discovery Value is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,440 in Ab Discovery Value on August 26, 2024 and sell it today you would earn a total of 166.00 from holding Ab Discovery Value or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg International Value vs. Ab Discovery Value
Performance |
| Timeline |
| Thornburg International |
| Ab Discovery Value |
Thornburg International and Ab Discovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg International and Ab Discovery
The main advantage of trading using opposite Thornburg International and Ab Discovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg International position performs unexpectedly, Ab Discovery 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 Ab Discovery will offset losses from the drop in Ab Discovery'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 |
| Ab Discovery vs. Small Cap Core | Ab Discovery vs. Aquagold International | Ab Discovery vs. Morningstar Unconstrained Allocation | Ab Discovery vs. Thrivent High Yield |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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