Correlation Between Thornburg Value and Thornburg Investment
Can any of the company-specific risk be diversified away by investing in both Thornburg Value and Thornburg Investment 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 Thornburg Investment 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 Thornburg Investment Income, you can compare the effects of market volatilities on Thornburg Value and Thornburg Investment 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 Thornburg Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Value and Thornburg Investment.
Diversification Opportunities for Thornburg Value and Thornburg Investment
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thornburg and Thornburg is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Value Fund and Thornburg Investment Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Investment 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 Thornburg Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Investment has no effect on the direction of Thornburg Value i.e., Thornburg Value and Thornburg Investment go up and down completely randomly.
Pair Corralation between Thornburg Value and Thornburg Investment
Assuming the 90 days horizon Thornburg Value Fund is expected to generate 2.14 times more return on investment than Thornburg Investment. However, Thornburg Value is 2.14 times more volatile than Thornburg Investment Income. It trades about 0.11 of its potential returns per unit of risk. Thornburg Investment Income is currently generating about 0.04 per unit of risk. If you would invest 7,593 in Thornburg Value Fund on August 29, 2024 and sell it today you would earn a total of 1,348 from holding Thornburg Value Fund or generate 17.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg Value Fund vs. Thornburg Investment Income
Performance |
| Timeline |
| Thornburg Value |
| Thornburg Investment |
Thornburg Value and Thornburg Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Value and Thornburg Investment
The main advantage of trading using opposite Thornburg Value and Thornburg Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Value position performs unexpectedly, Thornburg Investment 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 Investment will offset losses from the drop in Thornburg Investment's long position.| Thornburg Value vs. Nebraska Municipal Fund | Thornburg Value vs. Ambrus Core Bond | Thornburg Value vs. Prudential Jennison Financial | Thornburg Value vs. Transamerica Funds |
| Thornburg Investment vs. Capital Income Builder | Thornburg Investment vs. Capital Income Builder | Thornburg Investment vs. Capital Income Builder | Thornburg Investment vs. HUMANA INC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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