Correlation Between Thornburg Core and Thornburg Investment
Can any of the company-specific risk be diversified away by investing in both Thornburg Core and Thornburg Investment 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 Core and Thornburg Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg E Growth and Thornburg Investment Trust, you can compare the effects of market volatilities on Thornburg Core and Thornburg Investment 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 Core with a short position of Thornburg Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Core and Thornburg Investment.
Diversification Opportunities for Thornburg Core and Thornburg Investment
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thornburg and Thornburg is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg E Growth and Thornburg Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Investment and Thornburg Core 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 E Growth are associated (or correlated) with Thornburg Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Investment has no effect on the direction of Thornburg Core i.e., Thornburg Core and Thornburg Investment go up and down completely randomly.
Pair Corralation between Thornburg Core and Thornburg Investment
Assuming the 90 days horizon Thornburg E Growth is expected to generate 1.53 times more return on investment than Thornburg Investment. However, Thornburg Core is 1.53 times more volatile than Thornburg Investment Trust. It trades about 0.09 of its potential returns per unit of risk. Thornburg Investment Trust is currently generating about -0.01 per unit of risk. If you would invest 3,330 in Thornburg E Growth on August 29, 2024 and sell it today you would earn a total of 455.00 from holding Thornburg E Growth or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg E Growth vs. Thornburg Investment Trust
Performance |
| Timeline |
| Thornburg E Growth |
| Thornburg Investment |
Thornburg Core and Thornburg Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Core and Thornburg Investment
The main advantage of trading using opposite Thornburg Core and Thornburg Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Core position performs unexpectedly, Thornburg Investment 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 Investment will offset losses from the drop in Thornburg Investment's long position.| Thornburg Core vs. Pgim Conservative Retirement | Thornburg Core vs. Dimensional Retirement Income | Thornburg Core vs. Qs Moderate Growth | Thornburg Core vs. Lifestyle Ii Moderate |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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