Correlation Between Large-cap Growth and Touchstone Large
Can any of the company-specific risk be diversified away by investing in both Large-cap Growth and Touchstone Large 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 Large-cap Growth and Touchstone Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Growth Profund and Touchstone Large Cap, you can compare the effects of market volatilities on Large-cap Growth and Touchstone Large 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 Large-cap Growth with a short position of Touchstone Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large-cap Growth and Touchstone Large.
Diversification Opportunities for Large-cap Growth and Touchstone Large
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Large-cap and Touchstone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Growth Profund and Touchstone Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Large Cap and Large-cap Growth 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 Large Cap Growth Profund are associated (or correlated) with Touchstone Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Large Cap has no effect on the direction of Large-cap Growth i.e., Large-cap Growth and Touchstone Large go up and down completely randomly.
Pair Corralation between Large-cap Growth and Touchstone Large
Assuming the 90 days horizon Large-cap Growth is expected to generate 1.03 times less return on investment than Touchstone Large. In addition to that, Large-cap Growth is 1.27 times more volatile than Touchstone Large Cap. It trades about 0.28 of its total potential returns per unit of risk. Touchstone Large Cap is currently generating about 0.37 per unit of volatility. If you would invest 1,947 in Touchstone Large Cap on September 4, 2024 and sell it today you would earn a total of 116.00 from holding Touchstone Large Cap or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Large Cap Growth Profund vs. Touchstone Large Cap
Performance |
| Timeline |
| Large Cap Growth |
| Touchstone Large Cap |
Large-cap Growth and Touchstone Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large-cap Growth and Touchstone Large
The main advantage of trading using opposite Large-cap Growth and Touchstone Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large-cap Growth position performs unexpectedly, Touchstone Large 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 Large will offset losses from the drop in Touchstone Large's long position.| Large-cap Growth vs. Scharf Global Opportunity | Large-cap Growth vs. Semiconductor Ultrasector Profund | Large-cap Growth vs. T Rowe Price | Large-cap Growth vs. Touchstone Large Cap |
| Touchstone Large vs. Champlain Mid Cap | Touchstone Large vs. Pace Smallmedium Growth | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. T Rowe Price |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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