Correlation Between Dynamic Us and Thornburg International

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

By analyzing existing cross correlation between Dynamic Opportunity Fund and Thornburg International Growth, you can compare the effects of market volatilities on Dynamic Us 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 Dynamic Us with a short position of Thornburg International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Us and Thornburg International.

Diversification Opportunities for Dynamic Us and Thornburg International

0.26

Correlation Coefficient

Dynamic Us  Thornburg International

Modest diversification

The 3 months correlation between Dynamic and Thornburg is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Opportunity Fund and Thornburg International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg International and Dynamic Us 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 Dynamic Opportunity Fund 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 Dynamic Us i.e., Dynamic Us and Thornburg International go up and down completely randomly.

Pair Corralation between Dynamic Us and Thornburg International

Assuming the 90 days horizon Dynamic Opportunity Fund is expected to under-perform the Thornburg International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dynamic Opportunity Fund is 1.8 times less risky than Thornburg International. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Thornburg International Growth is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,295  in Thornburg International Growth on December 22, 2024 and sell it today you would earn a total of  28.00  from holding Thornburg International Growth or generate 1.22% return on investment over 90 days.

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

Dynamic Opportunity Fund  vs.  Thornburg International Growth

Dynamic Opportunity

Risk-Adjusted Performance

Very Weak

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

Thornburg International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg International Growth are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Thornburg International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dynamic Us and Thornburg International

The main advantage of trading using opposite Dynamic Us and Thornburg International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Us 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.

The idea behind Dynamic Opportunity Fund and Thornburg International 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.