Correlation Between Thornburg Low and Thornburg International
Can any of the company-specific risk be diversified away by investing in both Thornburg Low and Thornburg International 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 Low and Thornburg International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg Low Duration and Thornburg International Value, you can compare the effects of market volatilities on Thornburg Low and Thornburg International 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 Low with a short position of Thornburg International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Low and Thornburg International.
Diversification Opportunities for Thornburg Low and Thornburg International
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thornburg and Thornburg is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Low Duration and Thornburg International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg International and Thornburg Low 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 Low Duration are associated (or correlated) with Thornburg International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg International has no effect on the direction of Thornburg Low i.e., Thornburg Low and Thornburg International go up and down completely randomly.
Pair Corralation between Thornburg Low and Thornburg International
Assuming the 90 days horizon Thornburg Low is expected to generate 1.79 times less return on investment than Thornburg International. But when comparing it to its historical volatility, Thornburg Low Duration is 7.16 times less risky than Thornburg International. It trades about 0.21 of its potential returns per unit of risk. Thornburg International Value is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,312 in Thornburg International Value on September 1, 2024 and sell it today you would earn a total of 398.00 from holding Thornburg International Value or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Thornburg Low Duration vs. Thornburg International Value
Performance |
| Timeline |
| Thornburg Low Duration |
| Thornburg International |
Thornburg Low and Thornburg International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Low and Thornburg International
The main advantage of trading using opposite Thornburg Low and Thornburg International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Low position performs unexpectedly, Thornburg International 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 International will offset losses from the drop in Thornburg International's long position.| Thornburg Low vs. Health Care Fund | Thornburg Low vs. The Gabelli Healthcare | Thornburg Low vs. Blackrock Health Sciences | Thornburg Low vs. Allianzgi Health Sciences |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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