Correlation Between Hartford Small and Touchstone International
Can any of the company-specific risk be diversified away by investing in both Hartford Small and Touchstone International 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 Hartford Small and Touchstone International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Small and Touchstone International Equity, you can compare the effects of market volatilities on Hartford Small and Touchstone International 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 Hartford Small with a short position of Touchstone International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Small and Touchstone International.
Diversification Opportunities for Hartford Small and Touchstone International
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hartford and Touchstone is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Small and Touchstone International Equit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone International and Hartford 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 The Hartford Small are associated (or correlated) with Touchstone International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone International has no effect on the direction of Hartford Small i.e., Hartford Small and Touchstone International go up and down completely randomly.
Pair Corralation between Hartford Small and Touchstone International
Assuming the 90 days horizon The Hartford Small is expected to under-perform the Touchstone International. In addition to that, Hartford Small is 1.81 times more volatile than Touchstone International Equity. It trades about -0.05 of its total potential returns per unit of risk. Touchstone International Equity is currently generating about -0.03 per unit of volatility. If you would invest 1,606 in Touchstone International Equity on September 12, 2024 and sell it today you would lose (6.00) from holding Touchstone International Equity or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Small vs. Touchstone International Equit
Performance |
| Timeline |
| Hartford Small |
| Touchstone International |
Hartford Small and Touchstone International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Small and Touchstone International
The main advantage of trading using opposite Hartford Small and Touchstone International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Small position performs unexpectedly, Touchstone International 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 International will offset losses from the drop in Touchstone International's long position.| Hartford Small vs. Fidelity Small Cap | Hartford Small vs. Heartland Value Plus | Hartford Small vs. Amg River Road | Hartford Small vs. Lsv Small Cap |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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