Correlation Between Thornburg Value and Transamerica Large
Can any of the company-specific risk be diversified away by investing in both Thornburg Value and Transamerica Large 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 Transamerica Large 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 Transamerica Large Cap, you can compare the effects of market volatilities on Thornburg Value and Transamerica Large 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 Transamerica Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Value and Transamerica Large.
Diversification Opportunities for Thornburg Value and Transamerica Large
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Thornburg and Transamerica is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Value Fund and Transamerica Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Large Cap 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 Transamerica Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Large Cap has no effect on the direction of Thornburg Value i.e., Thornburg Value and Transamerica Large go up and down completely randomly.
Pair Corralation between Thornburg Value and Transamerica Large
Assuming the 90 days horizon Thornburg Value Fund is expected to generate 1.61 times more return on investment than Transamerica Large. However, Thornburg Value is 1.61 times more volatile than Transamerica Large Cap. It trades about 0.08 of its potential returns per unit of risk. Transamerica Large Cap is currently generating about 0.11 per unit of risk. If you would invest 6,313 in Thornburg Value Fund on September 12, 2024 and sell it today you would earn a total of 2,022 from holding Thornburg Value Fund or generate 32.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg Value Fund vs. Transamerica Large Cap
Performance |
| Timeline |
| Thornburg Value |
| Transamerica Large Cap |
Thornburg Value and Transamerica Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Value and Transamerica Large
The main advantage of trading using opposite Thornburg Value and Transamerica Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Value position performs unexpectedly, Transamerica Large 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 Transamerica Large will offset losses from the drop in Transamerica Large's long position.| Thornburg Value vs. Transamerica Large Cap | Thornburg Value vs. Avantis Large Cap | Thornburg Value vs. M Large Cap | Thornburg Value vs. Dana Large Cap |
| Transamerica Large vs. Vanguard Value Index | Transamerica Large vs. Dodge Cox Stock | Transamerica Large vs. American Mutual Fund | Transamerica Large vs. American Funds American |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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