Correlation Between Thornburg Income and BlackRock Floating

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

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

Diversification Opportunities for Thornburg Income and BlackRock Floating

-0.29

Correlation Coefficient

Thornburg Income  BlackRock Floating

Very good diversification

The 3 months correlation between Thornburg and BlackRock is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Income Builder and BlackRock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Floating Rate and Thornburg Income 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 Thornburg Income Builder are associated (or correlated) with BlackRock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Floating Rate has no effect on the direction of Thornburg Income i.e., Thornburg Income and BlackRock Floating go up and down completely randomly.

Pair Corralation between Thornburg Income and BlackRock Floating

Given the investment horizon of 90 days Thornburg Income Builder is expected to under-perform the BlackRock Floating. In addition to that, Thornburg Income is 1.17 times more volatile than BlackRock Floating Rate. It trades about -0.02 of its total potential returns per unit of risk. BlackRock Floating Rate is currently generating about 0.13 per unit of volatility. If you would invest  1,239  in BlackRock Floating Rate on September 4, 2024 and sell it today you would earn a total of  68.00  from holding BlackRock Floating Rate or generate 5.49% return on investment over 90 days.

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

Thornburg Income Builder  vs.  BlackRock Floating Rate

Thornburg Income Builder

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thornburg Income Builder has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Thornburg Income is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

BlackRock Floating Rate

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Floating Rate are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, BlackRock Floating is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Thornburg Income and BlackRock Floating

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

The idea behind Thornburg Income Builder and BlackRock Floating Rate 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.