Correlation Between Barings Active and Touchstone Dividend
Can any of the company-specific risk be diversified away by investing in both Barings Active and Touchstone Dividend 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 Barings Active and Touchstone Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Touchstone Dividend Equity, you can compare the effects of market volatilities on Barings Active and Touchstone Dividend 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 Barings Active with a short position of Touchstone Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Touchstone Dividend.
Diversification Opportunities for Barings Active and Touchstone Dividend
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Touchstone is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Touchstone Dividend Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Dividend and Barings Active 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 Barings Active Short are associated (or correlated) with Touchstone Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Dividend has no effect on the direction of Barings Active i.e., Barings Active and Touchstone Dividend go up and down completely randomly.
Pair Corralation between Barings Active and Touchstone Dividend
Assuming the 90 days horizon Barings Active is expected to generate 7.73 times less return on investment than Touchstone Dividend. But when comparing it to its historical volatility, Barings Active Short is 5.26 times less risky than Touchstone Dividend. It trades about 0.11 of its potential returns per unit of risk. Touchstone Dividend Equity is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,950 in Touchstone Dividend Equity on August 29, 2024 and sell it today you would earn a total of 47.00 from holding Touchstone Dividend Equity or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Barings Active Short vs. Touchstone Dividend Equity
Performance |
| Timeline |
| Barings Active Short |
| Touchstone Dividend |
Barings Active and Touchstone Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Touchstone Dividend
The main advantage of trading using opposite Barings Active and Touchstone Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Touchstone Dividend 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 Dividend will offset losses from the drop in Touchstone Dividend's long position.| Barings Active vs. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
| Touchstone Dividend vs. T Rowe Price | Touchstone Dividend vs. Barings Active Short | Touchstone Dividend vs. Ambrus Core Bond | Touchstone Dividend vs. Financial Industries Fund |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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