Correlation Between American Century and Touchstone Focused
Can any of the company-specific risk be diversified away by investing in both American Century and Touchstone Focused 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 American Century and Touchstone Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Century Investment and Touchstone Focused Fund, you can compare the effects of market volatilities on American Century and Touchstone Focused 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 American Century with a short position of Touchstone Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Century and Touchstone Focused.
Diversification Opportunities for American Century and Touchstone Focused
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Touchstone is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding American Century Investment and Touchstone Focused Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Focused and American Century 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 American Century Investment are associated (or correlated) with Touchstone Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Focused has no effect on the direction of American Century i.e., American Century and Touchstone Focused go up and down completely randomly.
Pair Corralation between American Century and Touchstone Focused
Assuming the 90 days horizon American Century Investment is expected to under-perform the Touchstone Focused. In addition to that, American Century is 16.24 times more volatile than Touchstone Focused Fund. It trades about -0.14 of its total potential returns per unit of risk. Touchstone Focused Fund is currently generating about 0.1 per unit of volatility. If you would invest 5,224 in Touchstone Focused Fund on August 31, 2024 and sell it today you would earn a total of 1,475 from holding Touchstone Focused Fund or generate 28.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 12.6% |
| Values | Daily Returns |
American Century Investment vs. Touchstone Focused Fund
Performance |
| Timeline |
| American Century Inv |
| Touchstone Focused |
American Century and Touchstone Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Century and Touchstone Focused
The main advantage of trading using opposite American Century and Touchstone Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Century position performs unexpectedly, Touchstone Focused 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 Focused will offset losses from the drop in Touchstone Focused's long position.| American Century vs. Vanguard Total Stock | American Century vs. Vanguard 500 Index | American Century vs. Vanguard Total Stock | American Century vs. Vanguard Total Stock |
| Touchstone Focused vs. American Century Investment | Touchstone Focused vs. Chestnut Street Exchange | Touchstone Focused vs. Franklin Government Money | Touchstone Focused vs. Transamerica Funds |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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