Correlation Between DO Home and Touchstone International
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By analyzing existing cross correlation between DO Home Collection and Touchstone International Medical, you can compare the effects of market volatilities on DO Home and Touchstone International 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 DO Home with a short position of Touchstone International. Check out your portfolio center. Please also check ongoing floating volatility patterns of DO Home and Touchstone International.
Diversification Opportunities for DO Home and Touchstone International
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 002798 and Touchstone is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding DO Home Collection and Touchstone International Medic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone International and DO Home 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 DO Home Collection are associated (or correlated) with Touchstone International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone International has no effect on the direction of DO Home i.e., DO Home and Touchstone International go up and down completely randomly.
Pair Corralation between DO Home and Touchstone International
Assuming the 90 days trading horizon DO Home is expected to generate 1.67 times less return on investment than Touchstone International. In addition to that, DO Home is 1.68 times more volatile than Touchstone International Medical. It trades about 0.13 of its total potential returns per unit of risk. Touchstone International Medical is currently generating about 0.37 per unit of volatility. If you would invest 1,697 in Touchstone International Medical on November 7, 2024 and sell it today you would earn a total of 192.00 from holding Touchstone International Medical or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DO Home Collection vs. Touchstone International Medic
Performance |
| Timeline |
| DO Home Collection |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Touchstone International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DO Home and Touchstone International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DO Home and Touchstone International
The main advantage of trading using opposite DO Home and Touchstone International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DO Home position performs unexpectedly, Touchstone International 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 Touchstone International will offset losses from the drop in Touchstone International's long position.The idea behind DO Home Collection and Touchstone International Medical 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.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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