Correlation Between Dunham Large and Touchstone Large
Can any of the company-specific risk be diversified away by investing in both Dunham Large and Touchstone Large 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 Dunham Large and Touchstone Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Large Cap and Touchstone Large Cap, you can compare the effects of market volatilities on Dunham Large and Touchstone Large 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 Dunham Large with a short position of Touchstone Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Touchstone Large.
Diversification Opportunities for Dunham Large and Touchstone Large
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DUNHAM and Touchstone is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Touchstone Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Large Cap and Dunham Large 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 Dunham Large Cap are associated (or correlated) with Touchstone Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Large Cap has no effect on the direction of Dunham Large i.e., Dunham Large and Touchstone Large go up and down completely randomly.
Pair Corralation between Dunham Large and Touchstone Large
Assuming the 90 days horizon Dunham Large is expected to generate 1.14 times less return on investment than Touchstone Large. But when comparing it to its historical volatility, Dunham Large Cap is 1.08 times less risky than Touchstone Large. It trades about 0.35 of its potential returns per unit of risk. Touchstone Large Cap is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,950 in Touchstone Large Cap on September 1, 2024 and sell it today you would earn a total of 117.00 from holding Touchstone Large Cap or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dunham Large Cap vs. Touchstone Large Cap
Performance |
| Timeline |
| Dunham Large Cap |
| Touchstone Large Cap |
Dunham Large and Touchstone Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and Touchstone Large
The main advantage of trading using opposite Dunham Large and Touchstone Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, Touchstone Large 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 Large will offset losses from the drop in Touchstone Large's long position.| Dunham Large vs. Dunham Appreciation Income | Dunham Large vs. Dunham Dynamic Macro | Dunham Large vs. Dunham Small Cap | Dunham Large vs. Dunham Emerging Markets |
| Touchstone Large vs. Touchstone Small Cap | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. Mid Cap Growth |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |