Correlation Between Stellar and Thornburg New

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

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

Diversification Opportunities for Stellar and Thornburg New

0.05

Correlation Coefficient

Stellar  Thornburg New

Significant diversification

The 3 months correlation between Stellar and Thornburg is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Thornburg New Mexico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg New Mexico and Stellar 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 Stellar are associated (or correlated) with Thornburg New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg New Mexico has no effect on the direction of Stellar i.e., Stellar and Thornburg New go up and down completely randomly.

Pair Corralation between Stellar and Thornburg New

Assuming the 90 days trading horizon Stellar is expected to generate 47.21 times more return on investment than Thornburg New. However, Stellar is 47.21 times more volatile than Thornburg New Mexico. It trades about 0.01 of its potential returns per unit of risk. Thornburg New Mexico is currently generating about -0.42 per unit of risk. If you would invest  44.00  in Stellar on October 11, 2024 and sell it today you would lose (2.00) from holding Stellar or give up 4.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Stellar  vs.  Thornburg New Mexico

Stellar

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Stellar exhibited solid returns over the last few months and may actually be approaching a breakup point.

Thornburg New Mexico

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thornburg New Mexico has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Thornburg New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stellar and Thornburg New

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

The idea behind Stellar and Thornburg New Mexico 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.