Correlation Between Thornburg Global and Thornburg

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

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

Diversification Opportunities for Thornburg Global and Thornburg

-0.45

Correlation Coefficient

Thornburg Global  Thornburg

Very good diversification

The 3 months correlation between Thornburg and Thornburg is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Global Opportunities and Thornburg E Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg E Growth and Thornburg Global 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 Global Opportunities are associated (or correlated) with Thornburg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg E Growth has no effect on the direction of Thornburg Global i.e., Thornburg Global and Thornburg go up and down completely randomly.

Pair Corralation between Thornburg Global and Thornburg

Assuming the 90 days horizon Thornburg Global Opportunities is expected to under-perform the Thornburg. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thornburg Global Opportunities is 1.98 times less risky than Thornburg. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Thornburg E Growth is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,108  in Thornburg E Growth on October 11, 2024 and sell it today you would earn a total of  86.00  from holding Thornburg E Growth or generate 2.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Thornburg Global Opportunities  vs.  Thornburg E Growth

Thornburg Global Opp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thornburg Global Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Thornburg E Growth

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg E Growth are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Thornburg 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 Global and Thornburg

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

The idea behind Thornburg Global Opportunities and Thornburg E Growth 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.