Correlation Between Nasdaq-100(r) and Thornburg Global

Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Thornburg Global 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 Nasdaq-100(r) and Thornburg Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Thornburg Global Opportunities, you can compare the effects of market volatilities on Nasdaq-100(r) and Thornburg Global 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 Nasdaq-100(r) with a short position of Thornburg Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Thornburg Global.

Diversification Opportunities for Nasdaq-100(r) and Thornburg Global

-0.21

Correlation Coefficient

Nasdaq-100(r)  Thornburg Global

Very good diversification

The 3 months correlation between Nasdaq-100(r) and Thornburg is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Thornburg Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Global Opp and Nasdaq-100(r) 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 Nasdaq 100 2x Strategy are associated (or correlated) with Thornburg Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Global Opp has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Thornburg Global go up and down completely randomly.

Pair Corralation between Nasdaq-100(r) and Thornburg Global

Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to under-perform the Thornburg Global. In addition to that, Nasdaq-100(r) is 3.47 times more volatile than Thornburg Global Opportunities. It trades about -0.11 of its total potential returns per unit of risk. Thornburg Global Opportunities is currently generating about 0.18 per unit of volatility. If you would invest  3,610  in Thornburg Global Opportunities on December 21, 2024 and sell it today you would earn a total of  309.00  from holding Thornburg Global Opportunities or generate 8.56% return on investment over 90 days.

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

Nasdaq 100 2x Strategy  vs.  Thornburg Global Opportunities

Nasdaq 100 2x

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq 100 2x Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Thornburg Global Opp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg Global Opportunities are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Thornburg Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nasdaq-100(r) and Thornburg Global

The main advantage of trading using opposite Nasdaq-100(r) and Thornburg Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Thornburg Global 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 Global will offset losses from the drop in Thornburg Global's long position.

The idea behind Nasdaq 100 2x Strategy and Thornburg Global Opportunities 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.