Correlation Between Glg Intl and Touchstone Small
Can any of the company-specific risk be diversified away by investing in both Glg Intl and Touchstone Small 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 Glg Intl and Touchstone Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glg Intl Small and Touchstone Small Cap, you can compare the effects of market volatilities on Glg Intl and Touchstone Small 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 Glg Intl with a short position of Touchstone Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Touchstone Small.
Diversification Opportunities for Glg Intl and Touchstone Small
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glg and Touchstone is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Touchstone Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Small Cap and Glg Intl 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 Glg Intl Small are associated (or correlated) with Touchstone Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Small Cap has no effect on the direction of Glg Intl i.e., Glg Intl and Touchstone Small go up and down completely randomly.
Pair Corralation between Glg Intl and Touchstone Small
Assuming the 90 days horizon Glg Intl is expected to generate 13.92 times less return on investment than Touchstone Small. But when comparing it to its historical volatility, Glg Intl Small is 1.5 times less risky than Touchstone Small. It trades about 0.03 of its potential returns per unit of risk. Touchstone Small Cap is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,873 in Touchstone Small Cap on August 28, 2024 and sell it today you would earn a total of 321.00 from holding Touchstone Small Cap or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glg Intl Small vs. Touchstone Small Cap
Performance |
| Timeline |
| Glg Intl Small |
| Touchstone Small Cap |
Glg Intl and Touchstone Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and Touchstone Small
The main advantage of trading using opposite Glg Intl and Touchstone Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, Touchstone Small 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 Small will offset losses from the drop in Touchstone Small's long position.| Glg Intl vs. Dws Emerging Markets | Glg Intl vs. Western Assets Emerging | Glg Intl vs. Eagle Mlp Strategy | Glg Intl vs. Franklin Emerging Market |
| Touchstone Small vs. Legg Mason Bw | Touchstone Small vs. Old Westbury Large | Touchstone Small vs. Rational Strategic Allocation | Touchstone Small vs. Goldman Sachs Large |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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