Correlation Between Atac Inflation and Thornburg Core

Can any of the company-specific risk be diversified away by investing in both Atac Inflation and Thornburg Core 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 Atac Inflation and Thornburg Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atac Inflation Rotation and Thornburg E Growth, you can compare the effects of market volatilities on Atac Inflation and Thornburg Core 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 Atac Inflation with a short position of Thornburg Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atac Inflation and Thornburg Core.

Diversification Opportunities for Atac Inflation and Thornburg Core

0.74

Correlation Coefficient

Atac Inflation  Thornburg Core

Poor diversification

The 3 months correlation between Atac and Thornburg is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Atac Inflation Rotation and Thornburg E Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg E Growth and Atac Inflation 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 Atac Inflation Rotation are associated (or correlated) with Thornburg Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg E Growth has no effect on the direction of Atac Inflation i.e., Atac Inflation and Thornburg Core go up and down completely randomly.

Pair Corralation between Atac Inflation and Thornburg Core

Assuming the 90 days horizon Atac Inflation is expected to generate 1.54 times less return on investment than Thornburg Core. In addition to that, Atac Inflation is 1.06 times more volatile than Thornburg E Growth. It trades about 0.06 of its total potential returns per unit of risk. Thornburg E Growth is currently generating about 0.1 per unit of volatility. If you would invest  3,569  in Thornburg E Growth on October 26, 2024 and sell it today you would earn a total of  267.00  from holding Thornburg E Growth or generate 7.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Atac Inflation Rotation  vs.  Thornburg E Growth

Atac Inflation Rotation

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atac Inflation Rotation are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Atac Inflation is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Thornburg E Growth

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg E Growth are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Thornburg Core may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Atac Inflation and Thornburg Core

The main advantage of trading using opposite Atac Inflation and Thornburg Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atac Inflation position performs unexpectedly, Thornburg Core 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 Core will offset losses from the drop in Thornburg Core's long position.

The idea behind Atac Inflation Rotation and Thornburg E Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.