Correlation Between Thornburg Value and Thornburg Strategic
Can any of the company-specific risk be diversified away by investing in both Thornburg Value and Thornburg Strategic 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 Strategic 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 Strategic Municipal, you can compare the effects of market volatilities on Thornburg Value and Thornburg Strategic 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 Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Value and Thornburg Strategic.
Diversification Opportunities for Thornburg Value and Thornburg Strategic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thornburg and Thornburg is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Value Fund and Thornburg Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Strategic 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 Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Strategic has no effect on the direction of Thornburg Value i.e., Thornburg Value and Thornburg Strategic go up and down completely randomly.
Pair Corralation between Thornburg Value and Thornburg Strategic
Assuming the 90 days horizon Thornburg Value Fund is expected to generate 6.66 times more return on investment than Thornburg Strategic. However, Thornburg Value is 6.66 times more volatile than Thornburg Strategic Municipal. It trades about 0.08 of its potential returns per unit of risk. Thornburg Strategic Municipal is currently generating about 0.04 per unit of risk. If you would invest 8,364 in Thornburg Value Fund on November 3, 2024 and sell it today you would earn a total of 165.00 from holding Thornburg Value Fund or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Thornburg Value Fund vs. Thornburg Strategic Municipal
Performance |
| Timeline |
| Thornburg Value |
| Thornburg Strategic |
Thornburg Value and Thornburg Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Value and Thornburg Strategic
The main advantage of trading using opposite Thornburg Value and Thornburg Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Value position performs unexpectedly, Thornburg Strategic 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 Strategic will offset losses from the drop in Thornburg Strategic's long position.| Thornburg Value vs. Fidelity Advisor Energy | Thornburg Value vs. Thrivent Natural Resources | Thornburg Value vs. Franklin Natural Resources | Thornburg Value vs. Short Oil Gas |
| Thornburg Strategic vs. Thornburg Value Fund | Thornburg Strategic vs. Thornburg Value Fund | Thornburg Strategic vs. Thornburg New York | Thornburg Strategic vs. Thornburg International Value |
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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