Correlation Between Guggenheim Taxable and Thornburg Income

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

By analyzing existing cross correlation between Guggenheim Taxable Municipal and Thornburg Income Builder, you can compare the effects of market volatilities on Guggenheim Taxable and Thornburg Income 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 Guggenheim Taxable with a short position of Thornburg Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Taxable and Thornburg Income.

Diversification Opportunities for Guggenheim Taxable and Thornburg Income

0.5

Correlation Coefficient

Guggenheim Taxable  Thornburg Income

Very weak diversification

The 3 months correlation between Guggenheim and Thornburg is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Taxable Municipal and Thornburg Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Income Builder and Guggenheim Taxable 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 Guggenheim Taxable Municipal are associated (or correlated) with Thornburg Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Income Builder has no effect on the direction of Guggenheim Taxable i.e., Guggenheim Taxable and Thornburg Income go up and down completely randomly.

Pair Corralation between Guggenheim Taxable and Thornburg Income

Given the investment horizon of 90 days Guggenheim Taxable is expected to generate 3.01 times less return on investment than Thornburg Income. In addition to that, Guggenheim Taxable is 1.13 times more volatile than Thornburg Income Builder. It trades about 0.08 of its total potential returns per unit of risk. Thornburg Income Builder is currently generating about 0.29 per unit of volatility. If you would invest  1,609  in Thornburg Income Builder on December 31, 2024 and sell it today you would earn a total of  165.00  from holding Thornburg Income Builder or generate 10.25% return on investment over 90 days.

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

Guggenheim Taxable Municipal  vs.  Thornburg Income Builder

Guggenheim Taxable

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Taxable Municipal are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Guggenheim Taxable is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Thornburg Income Builder

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg Income Builder are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Thornburg Income may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Guggenheim Taxable and Thornburg Income

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

The idea behind Guggenheim Taxable Municipal and Thornburg Income Builder 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.