Correlation Between Volatility Shares and Touchstone ETF
Can any of the company-specific risk be diversified away by investing in both Volatility Shares 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 Volatility Shares and Touchstone ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volatility Shares Trust and Touchstone ETF Trust, you can compare the effects of market volatilities on Volatility Shares 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 Volatility Shares with a short position of Touchstone ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and Touchstone ETF.
Diversification Opportunities for Volatility Shares and Touchstone ETF
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Volatility and Touchstone is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust 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 Volatility Shares 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 Volatility Shares Trust 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 Volatility Shares i.e., Volatility Shares and Touchstone ETF go up and down completely randomly.
Pair Corralation between Volatility Shares and Touchstone ETF
Given the investment horizon of 90 days Volatility Shares Trust is expected to generate 60.52 times more return on investment than Touchstone ETF. However, Volatility Shares is 60.52 times more volatile than Touchstone ETF Trust. It trades about 0.09 of its potential returns per unit of risk. Touchstone ETF Trust is currently generating about -0.09 per unit of risk. If you would invest 5,764 in Volatility Shares Trust on October 9, 2024 and sell it today you would earn a total of 442.00 from holding Volatility Shares Trust or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volatility Shares Trust vs. Touchstone ETF Trust
Performance |
| Timeline |
| Volatility Shares Trust |
| Touchstone ETF Trust |
Volatility Shares and Touchstone ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volatility Shares and Touchstone ETF
The main advantage of trading using opposite Volatility Shares and Touchstone ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares 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.| Volatility Shares vs. ProShares Trust | Volatility Shares vs. iShares Ethereum Trust | Volatility Shares vs. ProShares Trust | Volatility Shares vs. Grayscale Ethereum Trust |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |