Correlation Between Fisher Investments and Thornburg New

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

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

Diversification Opportunities for Fisher Investments and Thornburg New

0.55

Correlation Coefficient

Fisher Investments  Thornburg New

Very weak diversification

The 3 months correlation between Fisher and Thornburg is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Large Cap 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 Fisher Investments 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 Fisher Large Cap 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 Fisher Investments i.e., Fisher Investments and Thornburg New go up and down completely randomly.

Pair Corralation between Fisher Investments and Thornburg New

Assuming the 90 days horizon Fisher Large Cap is expected to under-perform the Thornburg New. In addition to that, Fisher Investments is 5.62 times more volatile than Thornburg New Mexico. It trades about -0.26 of its total potential returns per unit of risk. Thornburg New Mexico is currently generating about -0.41 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	Weak
Accuracy	100.0%
Values	Daily Returns

Fisher Large Cap  vs.  Thornburg New Mexico

Fisher Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fisher Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fisher Investments 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 primary 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 Fisher Investments and Thornburg New

The main advantage of trading using opposite Fisher Investments and Thornburg New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Investments 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 Fisher Large Cap 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.