Correlation Between Thornburg Investment and Thornburg Global

Can any of the company-specific risk be diversified away by investing in both Thornburg Investment 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 Investment 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 Investment Trust and Thornburg Global Opportunities, you can compare the effects of market volatilities on Thornburg Investment 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 Investment with a short position of Thornburg Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Investment and Thornburg Global.

Diversification Opportunities for Thornburg Investment and Thornburg Global

-0.32

Correlation Coefficient

Thornburg Investment  Thornburg Global

Very good diversification

The 3 months correlation between Thornburg and Thornburg is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Investment Trust 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 Investment 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 Investment Trust 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 Investment i.e., Thornburg Investment and Thornburg Global go up and down completely randomly.

Pair Corralation between Thornburg Investment and Thornburg Global

Assuming the 90 days horizon Thornburg Investment Trust is expected to under-perform the Thornburg Global. In addition to that, Thornburg Investment is 1.08 times more volatile than Thornburg Global Opportunities. It trades about -0.03 of its total potential returns per unit of risk. Thornburg Global Opportunities is currently generating about 0.16 per unit of volatility. If you would invest  3,617  in Thornburg Global Opportunities on December 30, 2024 and sell it today you would earn a total of  284.00  from holding Thornburg Global Opportunities or generate 7.85% return on investment over 90 days.

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

Thornburg Investment Trust  vs.  Thornburg Global Opportunities

Thornburg Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thornburg Investment Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Thornburg Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Thornburg Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Thornburg Investment and Thornburg Global

The main advantage of trading using opposite Thornburg Investment and Thornburg Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Investment 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 Investment Trust 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..