Correlation Between Scharf Fund and Touchstone International
Can any of the company-specific risk be diversified away by investing in both Scharf Fund 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 Scharf Fund and Touchstone International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Fund Retail and Touchstone International Equity, you can compare the effects of market volatilities on Scharf Fund 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 Scharf Fund with a short position of Touchstone International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Touchstone International.
Diversification Opportunities for Scharf Fund and Touchstone International
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scharf and Touchstone is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Touchstone International Equit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone International and Scharf Fund 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 Scharf Fund Retail 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 Scharf Fund i.e., Scharf Fund and Touchstone International go up and down completely randomly.
Pair Corralation between Scharf Fund and Touchstone International
Assuming the 90 days horizon Scharf Fund Retail is expected to generate 0.92 times more return on investment than Touchstone International. However, Scharf Fund Retail is 1.09 times less risky than Touchstone International. It trades about 0.06 of its potential returns per unit of risk. Touchstone International Equity is currently generating about 0.03 per unit of risk. If you would invest 4,783 in Scharf Fund Retail on September 1, 2024 and sell it today you would earn a total of 974.00 from holding Scharf Fund Retail or generate 20.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Touchstone International Equit
Performance |
| Timeline |
| Scharf Fund Retail |
| Touchstone International |
Scharf Fund and Touchstone International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Touchstone International
The main advantage of trading using opposite Scharf Fund and Touchstone International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund 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.| Scharf Fund vs. Guidepath Managed Futures | Scharf Fund vs. Asg Managed Futures | Scharf Fund vs. Oklahoma College Savings | Scharf Fund vs. Blackrock Inflation Protected |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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