Correlation Between The Hartford and Touchstone Small
Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and Touchstone Small 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 Small Cap, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Touchstone Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Touchstone Small.
Diversification Opportunities for The Hartford and Touchstone Small
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between THE and Touchstone is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford 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 The Hartford 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 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 The Hartford i.e., The Hartford and Touchstone Small go up and down completely randomly.
Pair Corralation between The Hartford and Touchstone Small
Assuming the 90 days horizon The Hartford Small is expected to generate 0.97 times more return on investment than Touchstone Small. However, The Hartford Small is 1.03 times less risky than Touchstone Small. It trades about 0.18 of its potential returns per unit of risk. Touchstone Small Cap is currently generating about 0.18 per unit of risk. If you would invest 2,891 in The Hartford Small on August 24, 2024 and sell it today you would earn a total of 173.00 from holding The Hartford Small or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Small vs. Touchstone Small Cap
Performance |
| Timeline |
| Hartford Small |
| Touchstone Small Cap |
The Hartford and Touchstone Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Touchstone Small
The main advantage of trading using opposite The Hartford and Touchstone Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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.| The Hartford vs. Vanguard Small Cap Growth | The Hartford vs. Vanguard Small Cap Growth | The Hartford vs. Vanguard Explorer Fund | The Hartford vs. Vanguard Explorer Fund |
| Touchstone Small vs. Us Global Investors | Touchstone Small vs. T Rowe Price | Touchstone Small vs. Nuveen Global Real | Touchstone Small vs. The Hartford Global |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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