Correlation Between Thornburg Global and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Thornburg Global and Ab Municipal 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 Global and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg Global Opportunities and Ab Municipal Bond, you can compare the effects of market volatilities on Thornburg Global and Ab Municipal 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 Global with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Global and Ab Municipal.
Diversification Opportunities for Thornburg Global and Ab Municipal
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thornburg and AUNYX is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Global Opportunities and Ab Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Municipal Bond and Thornburg Global 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 Global Opportunities are associated (or correlated) with Ab Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Municipal Bond has no effect on the direction of Thornburg Global i.e., Thornburg Global and Ab Municipal go up and down completely randomly.
Pair Corralation between Thornburg Global and Ab Municipal
Assuming the 90 days horizon Thornburg Global Opportunities is expected to generate 4.37 times more return on investment than Ab Municipal. However, Thornburg Global is 4.37 times more volatile than Ab Municipal Bond. It trades about 0.06 of its potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.11 per unit of risk. If you would invest 3,309 in Thornburg Global Opportunities on August 29, 2024 and sell it today you would earn a total of 469.00 from holding Thornburg Global Opportunities or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg Global Opportunities vs. Ab Municipal Bond
Performance |
| Timeline |
| Thornburg Global Opp |
| Ab Municipal Bond |
Thornburg Global and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Global and Ab Municipal
The main advantage of trading using opposite Thornburg Global and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Global position performs unexpectedly, Ab Municipal 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 Municipal will offset losses from the drop in Ab Municipal's long position.| Thornburg Global vs. Gabelli Convertible And | Thornburg Global vs. Virtus Convertible | Thornburg Global vs. Rationalpier 88 Convertible | Thornburg Global vs. Lord Abbett Convertible |
| Ab Municipal vs. Touchstone Large Cap | Ab Municipal vs. Qs Large Cap | Ab Municipal vs. Qs Large Cap | Ab Municipal vs. Transamerica Large Cap |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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