Correlation Between Thornburg Core and Thornburg Global

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

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

Diversification Opportunities for Thornburg Core and Thornburg Global

-0.17

Correlation Coefficient

Thornburg Core  Thornburg Global

Good diversification

The 3 months correlation between Thornburg and THORNBURG is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg E Growth 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 Thornburg Core 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 E Growth 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 Thornburg Core i.e., Thornburg Core and Thornburg Global go up and down completely randomly.

Pair Corralation between Thornburg Core and Thornburg Global

Assuming the 90 days horizon Thornburg E Growth is expected to under-perform the Thornburg Global. In addition to that, Thornburg Core is 2.06 times more volatile than Thornburg Global Opportunities. It trades about -0.19 of its total potential returns per unit of risk. Thornburg Global Opportunities is currently generating about 0.13 per unit of volatility. If you would invest  3,508  in Thornburg Global Opportunities on December 4, 2024 and sell it today you would earn a total of  180.00  from holding Thornburg Global Opportunities or generate 5.13% return on investment over 90 days.

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

Thornburg E Growth  vs.  Thornburg Global Opportunities

Thornburg E Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thornburg E Growth 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 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Thornburg Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thornburg Core and Thornburg Global

The main advantage of trading using opposite Thornburg Core and Thornburg Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Core 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 Thornburg E Growth 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.