Correlation Between Thornburg Value and Guggenheim High
Can any of the company-specific risk be diversified away by investing in both Thornburg Value and Guggenheim High 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 Value and Guggenheim High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg Value Fund and Guggenheim High Yield, you can compare the effects of market volatilities on Thornburg Value and Guggenheim High 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 Value with a short position of Guggenheim High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Value and Guggenheim High.
Diversification Opportunities for Thornburg Value and Guggenheim High
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thornburg and Guggenheim is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Value Fund and Guggenheim High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim High Yield and Thornburg Value 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 Value Fund are associated (or correlated) with Guggenheim High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim High Yield has no effect on the direction of Thornburg Value i.e., Thornburg Value and Guggenheim High go up and down completely randomly.
Pair Corralation between Thornburg Value and Guggenheim High
Assuming the 90 days horizon Thornburg Value Fund is expected to generate 4.65 times more return on investment than Guggenheim High. However, Thornburg Value is 4.65 times more volatile than Guggenheim High Yield. It trades about 0.09 of its potential returns per unit of risk. Guggenheim High Yield is currently generating about 0.17 per unit of risk. If you would invest 6,336 in Thornburg Value Fund on September 12, 2024 and sell it today you would earn a total of 2,485 from holding Thornburg Value Fund or generate 39.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg Value Fund vs. Guggenheim High Yield
Performance |
| Timeline |
| Thornburg Value |
| Guggenheim High Yield |
Thornburg Value and Guggenheim High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Value and Guggenheim High
The main advantage of trading using opposite Thornburg Value and Guggenheim High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Value position performs unexpectedly, Guggenheim High 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 Guggenheim High will offset losses from the drop in Guggenheim High's long position.| Thornburg Value vs. Ep Emerging Markets | Thornburg Value vs. Transamerica Emerging Markets | Thornburg Value vs. Pnc Emerging Markets | Thornburg Value vs. Origin 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.
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