Correlation Between Scharf Fund and Touchstone Small
Can any of the company-specific risk be diversified away by investing in both Scharf Fund 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 Scharf Fund and Touchstone Small 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 Small Cap, you can compare the effects of market volatilities on Scharf Fund 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 Scharf Fund with a short position of Touchstone Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Touchstone Small.
Diversification Opportunities for Scharf Fund and Touchstone Small
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scharf and Touchstone is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail 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 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 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 Scharf Fund i.e., Scharf Fund and Touchstone Small go up and down completely randomly.
Pair Corralation between Scharf Fund and Touchstone Small
Assuming the 90 days horizon Scharf Fund is expected to generate 1.59 times less return on investment than Touchstone Small. But when comparing it to its historical volatility, Scharf Fund Retail is 2.35 times less risky than Touchstone Small. It trades about 0.44 of its potential returns per unit of risk. Touchstone Small Cap is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,810 in Touchstone Small Cap on September 1, 2024 and sell it today you would earn a total of 367.00 from holding Touchstone Small Cap or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Touchstone Small Cap
Performance |
| Timeline |
| Scharf Fund Retail |
| Touchstone Small Cap |
Scharf Fund and Touchstone Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Touchstone Small
The main advantage of trading using opposite Scharf Fund and Touchstone Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund 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.| Scharf Fund vs. Guidepath Managed Futures | Scharf Fund vs. Asg Managed Futures | Scharf Fund vs. Oklahoma College Savings | Scharf Fund vs. Blackrock Inflation Protected |
| Touchstone Small vs. Cutler Equity | Touchstone Small vs. Scharf Fund Retail | Touchstone Small vs. Huber Capital Equity | Touchstone Small vs. Icon Equity Income |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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