Correlation Between Thornburg Global and Nuveen Strategic

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

Diversification Opportunities for Thornburg Global and Nuveen Strategic

-0.04

Correlation Coefficient

Thornburg Global  Nuveen Strategic

Good diversification

The 3 months correlation between Thornburg and Nuveen is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Global Opportunities and Nuveen Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Strategic Mun 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 Nuveen Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Strategic Mun has no effect on the direction of Thornburg Global i.e., Thornburg Global and Nuveen Strategic go up and down completely randomly.

Pair Corralation between Thornburg Global and Nuveen Strategic

Assuming the 90 days horizon Thornburg Global Opportunities is expected to under-perform the Nuveen Strategic. In addition to that, Thornburg Global is 2.44 times more volatile than Nuveen Strategic Municipal. It trades about -0.19 of its total potential returns per unit of risk. Nuveen Strategic Municipal is currently generating about -0.26 per unit of volatility. If you would invest  1,015  in Nuveen Strategic Municipal on October 11, 2024 and sell it today you would lose (16.00) from holding Nuveen Strategic Municipal or give up 1.58% of portfolio value over 90 days.

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

Thornburg Global Opportunities  vs.  Nuveen Strategic Municipal

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.

Nuveen Strategic Mun

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Strategic Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nuveen Strategic 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 Nuveen Strategic

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

The idea behind Thornburg Global Opportunities and Nuveen Strategic Municipal 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.