Correlation Between Astar and Touchstone ETF
Can any of the company-specific risk be diversified away by investing in both Astar and Touchstone ETF 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 Astar and Touchstone ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Touchstone ETF Trust, you can compare the effects of market volatilities on Astar and Touchstone ETF 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 Astar with a short position of Touchstone ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Touchstone ETF.
Diversification Opportunities for Astar and Touchstone ETF
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Astar and Touchstone is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Touchstone ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone ETF Trust and Astar 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 Astar are associated (or correlated) with Touchstone ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone ETF Trust has no effect on the direction of Astar i.e., Astar and Touchstone ETF go up and down completely randomly.
Pair Corralation between Astar and Touchstone ETF
Assuming the 90 days trading horizon Astar is expected to under-perform the Touchstone ETF. In addition to that, Astar is 47.89 times more volatile than Touchstone ETF Trust. It trades about -0.01 of its total potential returns per unit of risk. Touchstone ETF Trust is currently generating about -0.09 per unit of volatility. If you would invest 2,602 in Touchstone ETF Trust on October 9, 2024 and sell it today you would lose (5.00) from holding Touchstone ETF Trust or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Astar vs. Touchstone ETF Trust
Performance |
| Timeline |
| Astar |
| Touchstone ETF Trust |
Astar and Touchstone ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Touchstone ETF
The main advantage of trading using opposite Astar and Touchstone ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Touchstone ETF 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 ETF will offset losses from the drop in Touchstone ETF's long position.The idea behind Astar and Touchstone ETF Trust 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.| Touchstone ETF vs. Valued Advisers Trust | Touchstone ETF vs. Columbia Diversified Fixed | Touchstone ETF vs. Principal Exchange Traded Funds | Touchstone ETF vs. Doubleline Etf Trust |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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