Correlation Between Thornburg International and Thornburg
Can any of the company-specific risk be diversified away by investing in both Thornburg International and Thornburg 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 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg International Growth and Thornburg E Growth, you can compare the effects of market volatilities on Thornburg International and Thornburg 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg International and Thornburg.
Diversification Opportunities for Thornburg International and Thornburg
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thornburg and Thornburg is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg International Growth and Thornburg E Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg E Growth 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 Growth are associated (or correlated) with Thornburg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg E Growth has no effect on the direction of Thornburg International i.e., Thornburg International and Thornburg go up and down completely randomly.
Pair Corralation between Thornburg International and Thornburg
Assuming the 90 days horizon Thornburg International is expected to generate 3.58 times less return on investment than Thornburg. But when comparing it to its historical volatility, Thornburg International Growth is 1.36 times less risky than Thornburg. It trades about 0.03 of its potential returns per unit of risk. Thornburg E Growth is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,477 in Thornburg E Growth on September 12, 2024 and sell it today you would earn a total of 749.00 from holding Thornburg E Growth or generate 30.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg International Growth vs. Thornburg E Growth
Performance |
| Timeline |
| Thornburg International |
| Thornburg E Growth |
Thornburg International and Thornburg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg International and Thornburg
The main advantage of trading using opposite Thornburg International and Thornburg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg International position performs unexpectedly, Thornburg 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 will offset losses from the drop in Thornburg's long position.The idea behind Thornburg International Growth and Thornburg E Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Thornburg vs. Lord Abbett Government | Thornburg vs. Hsbc Government Money | Thornburg vs. Goldman Sachs Government | Thornburg vs. Elfun Government Money |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |