Correlation Between Eagle Small and Touchstone Small
Can any of the company-specific risk be diversified away by investing in both Eagle Small 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 Eagle Small and Touchstone Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Small Cap and Touchstone Small Cap, you can compare the effects of market volatilities on Eagle Small 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 Eagle Small with a short position of Touchstone Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Small and Touchstone Small.
Diversification Opportunities for Eagle Small and Touchstone Small
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and Touchstone is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Small Cap 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 Eagle Small 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 Eagle Small Cap 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 Eagle Small i.e., Eagle Small and Touchstone Small go up and down completely randomly.
Pair Corralation between Eagle Small and Touchstone Small
Assuming the 90 days horizon Eagle Small Cap is expected to under-perform the Touchstone Small. In addition to that, Eagle Small is 1.4 times more volatile than Touchstone Small Cap. It trades about 0.0 of its total potential returns per unit of risk. Touchstone Small Cap is currently generating about 0.05 per unit of volatility. If you would invest 3,030 in Touchstone Small Cap on December 4, 2024 and sell it today you would earn a total of 736.00 from holding Touchstone Small Cap or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Small Cap vs. Touchstone Small Cap
Performance |
| Timeline |
| Eagle Small Cap |
| Touchstone Small Cap |
Eagle Small and Touchstone Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Small and Touchstone Small
The main advantage of trading using opposite Eagle Small and Touchstone Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Small 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.| Eagle Small vs. Allianzgi Small Cap Blend | Eagle Small vs. T Rowe Price | Eagle Small vs. Channing Intrinsic Value | Eagle Small vs. T Rowe Price |
| Touchstone Small vs. Federated Government Income | Touchstone Small vs. Vanguard Growth Index | Touchstone Small vs. Nuveen North Carolina | Touchstone Small vs. Victory Incore 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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