Correlation Between Great West and Touchstone Ultra
Can any of the company-specific risk be diversified away by investing in both Great West and Touchstone Ultra 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 Great West and Touchstone Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Lifetime 2020 and Touchstone Ultra Short, you can compare the effects of market volatilities on Great West and Touchstone Ultra 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 Great West with a short position of Touchstone Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Touchstone Ultra.
Diversification Opportunities for Great West and Touchstone Ultra
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Great and Touchstone is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifetime 2020 and Touchstone Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Ultra Short and Great West 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 Great West Lifetime 2020 are associated (or correlated) with Touchstone Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Ultra Short has no effect on the direction of Great West i.e., Great West and Touchstone Ultra go up and down completely randomly.
Pair Corralation between Great West and Touchstone Ultra
Assuming the 90 days horizon Great West Lifetime 2020 is expected to generate 3.92 times more return on investment than Touchstone Ultra. However, Great West is 3.92 times more volatile than Touchstone Ultra Short. It trades about 0.08 of its potential returns per unit of risk. Touchstone Ultra Short is currently generating about 0.24 per unit of risk. If you would invest 969.00 in Great West Lifetime 2020 on November 3, 2024 and sell it today you would earn a total of 76.00 from holding Great West Lifetime 2020 or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Lifetime 2020 vs. Touchstone Ultra Short
Performance |
| Timeline |
| Great West Lifetime |
| Touchstone Ultra Short |
Great West and Touchstone Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Touchstone Ultra
The main advantage of trading using opposite Great West and Touchstone Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Touchstone Ultra 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 Ultra will offset losses from the drop in Touchstone Ultra's long position.| Great West vs. Calamos Growth Fund | Great West vs. Upright Growth Income | Great West vs. L Abbett Growth | Great West vs. The Hartford Growth |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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