Correlation Between 361 Global and Touchstone Arbitrage
Can any of the company-specific risk be diversified away by investing in both 361 Global and Touchstone Arbitrage 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 361 Global and Touchstone Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 361 Global Longshort and Touchstone Arbitrage Fund, you can compare the effects of market volatilities on 361 Global and Touchstone Arbitrage 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 361 Global with a short position of Touchstone Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of 361 Global and Touchstone Arbitrage.
Diversification Opportunities for 361 Global and Touchstone Arbitrage
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 361 and Touchstone is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding 361 Global Longshort and Touchstone Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Arbitrage and 361 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 361 Global Longshort are associated (or correlated) with Touchstone Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Arbitrage has no effect on the direction of 361 Global i.e., 361 Global and Touchstone Arbitrage go up and down completely randomly.
Pair Corralation between 361 Global and Touchstone Arbitrage
Assuming the 90 days horizon 361 Global Longshort is expected to generate 2.54 times more return on investment than Touchstone Arbitrage. However, 361 Global is 2.54 times more volatile than Touchstone Arbitrage Fund. It trades about 0.08 of its potential returns per unit of risk. Touchstone Arbitrage Fund is currently generating about 0.17 per unit of risk. If you would invest 1,268 in 361 Global Longshort on September 4, 2024 and sell it today you would earn a total of 9.00 from holding 361 Global Longshort or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
361 Global Longshort vs. Touchstone Arbitrage Fund
Performance |
| Timeline |
| 361 Global Longshort |
| Touchstone Arbitrage |
361 Global and Touchstone Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 361 Global and Touchstone Arbitrage
The main advantage of trading using opposite 361 Global and Touchstone Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 361 Global position performs unexpectedly, Touchstone Arbitrage 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 Arbitrage will offset losses from the drop in Touchstone Arbitrage's long position.| 361 Global vs. Aqr Large Cap | 361 Global vs. Americafirst Large Cap | 361 Global vs. Siit Large Cap | 361 Global vs. Qs Large Cap |
| Touchstone Arbitrage vs. T Rowe Price | Touchstone Arbitrage vs. Acm Dynamic Opportunity | Touchstone Arbitrage vs. Arrow Managed Futures | Touchstone Arbitrage vs. Scharf Global Opportunity |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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