Correlation Between IShares Intermediate and Touchstone ETF
Can any of the company-specific risk be diversified away by investing in both IShares Intermediate 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 IShares Intermediate and Touchstone ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Intermediate GovernmentCredit and Touchstone ETF Trust, you can compare the effects of market volatilities on IShares Intermediate 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 IShares Intermediate with a short position of Touchstone ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Intermediate and Touchstone ETF.
Diversification Opportunities for IShares Intermediate and Touchstone ETF
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and Touchstone is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding iShares Intermediate Governmen 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 IShares Intermediate 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 iShares Intermediate GovernmentCredit 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 IShares Intermediate i.e., IShares Intermediate and Touchstone ETF go up and down completely randomly.
Pair Corralation between IShares Intermediate and Touchstone ETF
Considering the 90-day investment horizon iShares Intermediate GovernmentCredit is expected to under-perform the Touchstone ETF. In addition to that, IShares Intermediate is 1.03 times more volatile than Touchstone ETF Trust. It trades about -0.06 of its total potential returns per unit of risk. Touchstone ETF Trust is currently generating about 0.09 per unit of volatility. If you would invest 2,574 in Touchstone ETF Trust on October 7, 2024 and sell it today you would earn a total of 24.00 from holding Touchstone ETF Trust or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Intermediate Governmen vs. Touchstone ETF Trust
Performance |
| Timeline |
| iShares Intermediate |
| Touchstone ETF Trust |
IShares Intermediate and Touchstone ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Intermediate and Touchstone ETF
The main advantage of trading using opposite IShares Intermediate and Touchstone ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Intermediate 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.| IShares Intermediate vs. iShares GovernmentCredit Bond | IShares Intermediate vs. iShares Agency Bond | IShares Intermediate vs. iShares New York | IShares Intermediate vs. iShares MBS ETF |
| Touchstone ETF vs. Touchstone ETF Trust | Touchstone ETF vs. Touchstone Strategic Income | Touchstone ETF vs. Touchstone Dynamic International | Touchstone ETF vs. Touchstone 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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