Correlation Between Ep Emerging and Touchstone Sands
Can any of the company-specific risk be diversified away by investing in both Ep Emerging and Touchstone Sands 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 Ep Emerging and Touchstone Sands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ep Emerging Markets and Touchstone Sands Capital, you can compare the effects of market volatilities on Ep Emerging and Touchstone Sands 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 Ep Emerging with a short position of Touchstone Sands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and Touchstone Sands.
Diversification Opportunities for Ep Emerging and Touchstone Sands
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EPEIX and Touchstone is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and Touchstone Sands Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Sands Capital and Ep Emerging 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 Ep Emerging Markets are associated (or correlated) with Touchstone Sands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Sands Capital has no effect on the direction of Ep Emerging i.e., Ep Emerging and Touchstone Sands go up and down completely randomly.
Pair Corralation between Ep Emerging and Touchstone Sands
Assuming the 90 days horizon Ep Emerging Markets is expected to under-perform the Touchstone Sands. In addition to that, Ep Emerging is 1.1 times more volatile than Touchstone Sands Capital. It trades about -0.28 of its total potential returns per unit of risk. Touchstone Sands Capital is currently generating about -0.21 per unit of volatility. If you would invest 1,486 in Touchstone Sands Capital on August 29, 2024 and sell it today you would lose (53.00) from holding Touchstone Sands Capital or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ep Emerging Markets vs. Touchstone Sands Capital
Performance |
| Timeline |
| Ep Emerging Markets |
| Touchstone Sands Capital |
Ep Emerging and Touchstone Sands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and Touchstone Sands
The main advantage of trading using opposite Ep Emerging and Touchstone Sands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging position performs unexpectedly, Touchstone Sands 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 Sands will offset losses from the drop in Touchstone Sands' long position.| Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. HUMANA INC | Ep Emerging vs. Aquagold International |
| Touchstone Sands vs. Vanguard Emerging Markets | Touchstone Sands vs. Vanguard Emerging Markets | Touchstone Sands vs. HUMANA INC | Touchstone Sands vs. Aquagold International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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