Correlation Between Blackrock Inflation and Thornburg New

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

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

Diversification Opportunities for Blackrock Inflation and Thornburg New

0.66

Correlation Coefficient

Blackrock Inflation  Thornburg New

Poor diversification

The 3 months correlation between Blackrock and Thornburg is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Inflation Protected and Thornburg New Mexico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg New Mexico and Blackrock 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 Blackrock Inflation Protected are associated (or correlated) with Thornburg New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg New Mexico has no effect on the direction of Blackrock Inflation i.e., Blackrock Inflation and Thornburg New go up and down completely randomly.

Pair Corralation between Blackrock Inflation and Thornburg New

Assuming the 90 days horizon Blackrock Inflation Protected is expected to under-perform the Thornburg New. In addition to that, Blackrock Inflation is 1.38 times more volatile than Thornburg New Mexico. It trades about -0.36 of its total potential returns per unit of risk. Thornburg New Mexico is currently generating about -0.4 per unit of volatility. If you would invest  1,246  in Thornburg New Mexico on October 11, 2024 and sell it today you would lose (18.00) from holding Thornburg New Mexico or give up 1.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Blackrock Inflation Protected  vs.  Thornburg New Mexico

Blackrock Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Inflation Protected has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Blackrock Inflation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thornburg New Mexico

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thornburg New Mexico has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Thornburg New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackrock Inflation and Thornburg New

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

The idea behind Blackrock Inflation Protected and Thornburg New Mexico 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.