Correlation Between Thornburg Intermediate and Thornburg Core

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

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

Diversification Opportunities for Thornburg Intermediate and Thornburg Core

0.38

Correlation Coefficient

Thornburg Intermediate  Thornburg Core

Weak diversification

The 3 months correlation between Thornburg and Thornburg is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Intermediate Municip 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 Intermediate 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 Intermediate Municipal are associated (or correlated) with Thornburg Core. 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 Intermediate i.e., Thornburg Intermediate and Thornburg Core go up and down completely randomly.

Pair Corralation between Thornburg Intermediate and Thornburg Core

Assuming the 90 days horizon Thornburg Intermediate Municipal is expected to generate 0.12 times more return on investment than Thornburg Core. However, Thornburg Intermediate Municipal is 8.3 times less risky than Thornburg Core. It trades about 0.09 of its potential returns per unit of risk. Thornburg E Growth is currently generating about -0.04 per unit of risk. If you would invest  1,309  in Thornburg Intermediate Municipal on March 12, 2024 and sell it today you would earn a total of  7.00  from holding Thornburg Intermediate Municipal or generate 0.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Thornburg Intermediate Municip  vs.  Thornburg E Growth

Thornburg Intermediate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Thornburg E Growth

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, Thornburg Core 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 Intermediate and Thornburg Core

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

The idea behind Thornburg Intermediate Municipal 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.