Correlation Between Thornburg Global and Gmo Emerging
Can any of the company-specific risk be diversified away by investing in both Thornburg Global and Gmo Emerging 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 Gmo Emerging 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 Gmo Emerging Ntry, you can compare the effects of market volatilities on Thornburg Global and Gmo Emerging 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 Gmo Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Global and Gmo Emerging.
Diversification Opportunities for Thornburg Global and Gmo Emerging
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thornburg and Gmo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Global Opportunities and Gmo Emerging Ntry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Emerging Ntry 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 Gmo Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Emerging Ntry has no effect on the direction of Thornburg Global i.e., Thornburg Global and Gmo Emerging go up and down completely randomly.
Pair Corralation between Thornburg Global and Gmo Emerging
Assuming the 90 days horizon Thornburg Global Opportunities is expected to under-perform the Gmo Emerging. In addition to that, Thornburg Global is 2.16 times more volatile than Gmo Emerging Ntry. It trades about -0.25 of its total potential returns per unit of risk. Gmo Emerging Ntry is currently generating about 0.17 per unit of volatility. If you would invest 2,061 in Gmo Emerging Ntry on August 29, 2024 and sell it today you would earn a total of 28.00 from holding Gmo Emerging Ntry or generate 1.36% 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. Gmo Emerging Ntry
Performance |
| Timeline |
| Thornburg Global Opp |
| Gmo Emerging Ntry |
Thornburg Global and Gmo Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Global and Gmo Emerging
The main advantage of trading using opposite Thornburg Global and Gmo Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Global position performs unexpectedly, Gmo Emerging 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 Gmo Emerging will offset losses from the drop in Gmo Emerging's long position.| Thornburg Global vs. Thornburg Investment Income | Thornburg Global vs. Oppenheimer Global | Thornburg Global vs. Thornburg Developing World | Thornburg Global vs. Thornburg International Growth |
| Gmo Emerging vs. Gmo Emerging Country | Gmo Emerging vs. Tcw Emerging Markets | Gmo Emerging vs. Jpmorgan Emerging Markets | Gmo Emerging vs. Gmo Emerging Markets |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |