Correlation Between Investec Global and Thornburg International
Can any of the company-specific risk be diversified away by investing in both Investec Global 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 Investec Global and Thornburg International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Global Franchise and Thornburg International Value, you can compare the effects of market volatilities on Investec Global 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 Investec Global with a short position of Thornburg International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Global and Thornburg International.
Diversification Opportunities for Investec Global and Thornburg International
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Investec and Thornburg is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Investec Global Franchise and Thornburg International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg International and Investec Global 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 Investec Global Franchise 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 Investec Global i.e., Investec Global and Thornburg International go up and down completely randomly.
Pair Corralation between Investec Global and Thornburg International
Assuming the 90 days horizon Investec Global Franchise is expected to generate 0.5 times more return on investment than Thornburg International. However, Investec Global Franchise is 2.02 times less risky than Thornburg International. It trades about 0.11 of its potential returns per unit of risk. Thornburg International Value is currently generating about -0.21 per unit of risk. If you would invest 1,776 in Investec Global Franchise on September 13, 2024 and sell it today you would earn a total of 43.00 from holding Investec Global Franchise or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Global Franchise vs. Thornburg International Value
Performance |
| Timeline |
| Investec Global Franchise |
| Thornburg International |
Investec Global and Thornburg International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Global and Thornburg International
The main advantage of trading using opposite Investec Global and Thornburg International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Global 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.| Investec Global vs. Investec Emerging Markets | Investec Global vs. Investec Global Franchise | Investec Global vs. Ninety One International | Investec Global vs. Vanguard 500 Index |
| Thornburg International vs. Shelton Emerging Markets | Thornburg International vs. Ep Emerging Markets | Thornburg International vs. Mid Cap 15x Strategy | Thornburg International vs. Siit 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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