Correlation Between Thornburg Income and Guggenheim Active

Can any of the company-specific risk be diversified away by investing in both Thornburg Income and Guggenheim Active 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 Guggenheim Active 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 Guggenheim Active Allocation, you can compare the effects of market volatilities on Thornburg Income and Guggenheim Active 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 Guggenheim Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Income and Guggenheim Active.

Diversification Opportunities for Thornburg Income and Guggenheim Active

0.68

Correlation Coefficient

Thornburg Income  Guggenheim Active

Poor diversification

The 3 months correlation between Thornburg and Guggenheim is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Income Builder and Guggenheim Active Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Active 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 Guggenheim Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Active has no effect on the direction of Thornburg Income i.e., Thornburg Income and Guggenheim Active go up and down completely randomly.

Pair Corralation between Thornburg Income and Guggenheim Active

Given the investment horizon of 90 days Thornburg Income Builder is expected to generate 0.67 times more return on investment than Guggenheim Active. However, Thornburg Income Builder is 1.49 times less risky than Guggenheim Active. It trades about 0.26 of its potential returns per unit of risk. Guggenheim Active Allocation is currently generating about 0.08 per unit of risk. If you would invest  1,619  in Thornburg Income Builder on December 30, 2024 and sell it today you would earn a total of  155.00  from holding Thornburg Income Builder or generate 9.57% return on investment over 90 days.

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

Thornburg Income Builder  vs.  Guggenheim Active Allocation

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 20 (%) 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 April 2025.

Guggenheim Active

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Active Allocation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Guggenheim Active is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Thornburg Income and Guggenheim Active

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

The idea behind Thornburg Income Builder and Guggenheim Active Allocation 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.