Correlation Between Mfs Prudent and Thornburg Investment
Can any of the company-specific risk be diversified away by investing in both Mfs Prudent and Thornburg Investment 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 Mfs Prudent and Thornburg Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Prudent Investor and Thornburg Investment Income, you can compare the effects of market volatilities on Mfs Prudent and Thornburg Investment 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 Mfs Prudent with a short position of Thornburg Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Prudent and Thornburg Investment.
Diversification Opportunities for Mfs Prudent and Thornburg Investment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Thornburg is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Prudent Investor and Thornburg Investment Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Investment and Mfs Prudent 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 Mfs Prudent Investor are associated (or correlated) with Thornburg Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Investment has no effect on the direction of Mfs Prudent i.e., Mfs Prudent and Thornburg Investment go up and down completely randomly.
Pair Corralation between Mfs Prudent and Thornburg Investment
Assuming the 90 days horizon Mfs Prudent Investor is expected to under-perform the Thornburg Investment. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs Prudent Investor is 1.32 times less risky than Thornburg Investment. The mutual fund trades about -0.3 of its potential returns per unit of risk. The Thornburg Investment Income is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 2,474 in Thornburg Investment Income on January 20, 2024 and sell it today you would lose (28.00) from holding Thornburg Investment Income or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Prudent Investor vs. Thornburg Investment Income
Performance |
| Timeline |
| Mfs Prudent Investor |
| Thornburg Investment |
Mfs Prudent and Thornburg Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Prudent and Thornburg Investment
The main advantage of trading using opposite Mfs Prudent and Thornburg Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Prudent position performs unexpectedly, Thornburg Investment 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 Investment will offset losses from the drop in Thornburg Investment's long position.| Mfs Prudent vs. Mfs Lifetime 2065 | Mfs Prudent vs. Mfs Lifetime 2065 | Mfs Prudent vs. Mfs Lifetime 2065 | Mfs Prudent vs. Mfs Lifetime 2065 |
| Thornburg Investment vs. Franklin Income Fund | Thornburg Investment vs. First Eagle Global | Thornburg Investment vs. Blackrock Incm Ptf | Thornburg Investment vs. Oppenheimer International Bond |
Check out your portfolio center.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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